Bogged by declining sales and rising costs, the $1.2-billion Indian bicycle industry is at a crossroad. Bicycle manufacturers are worried as the industry has plunged by 8 per cent this year due to meagre exports and less domestic demand. A further decline is expected unless the government takes timely action, they said.
“We are at a disadvantage. The excise duty imposed by the government has made cycles expensive. We are also unable to export to lucrative markets in Europe due to trade restrictions. We want the government to intervene and provide us a level-playing field with Chinese bicycle industry,” Pankaj Munjal, President, All India Cycle manufacturers Association and co-Chairman & Managing Director, Hero Cycles, told The Hindu.
“We urge the government to withdraw the 2 per cent excise duty levied on bicycles since the last budget and the government should negotiate with European Union for getting the Most Preferred Nation status for export of bicycles to Europe,” Mr. Munjal said.
He said China had dwarfed India in terms of bicycle exports due to a favourabe policy and India must do the same for providing a level-playing field.
‘Reimburse inland freight’
“The Chinese bicycle industry is a mammoth $8 billion compared to our $1.2 billion. We are requesting the finance minister to reimburse the inland freight up to the port which is hindering the growth in the export segment,” Mr. Munjal added.
He said the Indian cycle industry could achieve export volume of $5 billion if a few corrective measures were taken. Earlier last week, Mr. Munjal, along with Punjab Chief Minister Prakash Singh Badal, met Prime Minister Manmohan Singh seeking his intervention. At this meeting, the delegation raised the concerns about declining bicycle business in India, more particularly in Punjab which is the hub of bicycle manufacturing.
The industry has also sought government’s support for upgrading technology and to create a task force for benchmarking of technology.
( Source www.thehindu.com )