Rising imports of
bicycles and their components from China to India at almost 25 per cent
cost-comparative advantage owing to free trade agreements (FTAs) together with
South Asia Free Trade Agreement (SAFTA) are posing a serious threat to domestic
bicycle industry producing over 41,000 bicycles per day, according to a just
concluded study undertaken by the ASSOCHAM Economic Research Bureau.
“There is a need to
increase the import duty on bicycles and its parts from prevailing 20% to 30%
as by doing this the prices of bicycles made both in India and China would
equate in the global market,” noted a just-concluded study on ‘Future of Indian
Bicycle Industry,’ conducted by The Associated Chambers of Commerce and
Industry of India (ASSOCHAM).
“There is an urgent
need to impose strict anti-dumping laws to check rising cheap imports of
bicycles and components from China which has been dumping its products into
India,” said Mr D.S. Rawat, secretary general of ASSOCHAM while releasing the
findings of the study.
“The imports of
bicycles and their components from China to India have risen by about 41 per
cent during the course of past five years, as such it is imperative for India
to review the FTAs and SAFTA to safeguard the interests of the domestic bicycle
industry,” said Mr Rawat.
India’s exports of
bicycle to other countries have grown at a compounded annual growth rate (CAGR)
of about 17 per cent while the imports grew at over double the rate of about 35
per cent mainly on account of uncompetitive pricing, noted the ASSOCHAM study.
“China has ranked on top amid countries importing bicycles and their components
into India with imports worth about $ 8,900 in 2007 to $ 35,000 in 2012.”
“Soaring fuel prices,
rising rural incomes, growing health consciousness together with free
distribution of bicycles to students by various state governments in order to
promote education and keep a check on dropout rates will push the growth of
bicycle industry in India and the industry is expected to generate about one
million jobs during the course of next couple of years or so,” highlighted the
ASSOCHAM study.
However, input cost
inflation like rising steel prices (largely due to rising exports of iron ore
pellets), poor condition of roads esp. in rural areas are other significant
challenges faced by the industry, it added.
India is world’s
second largest bicycle producer after China accounting for about 10 per cent of
global bicycle production and with an estimated market size worth $1.5 billion
Indian bicycle industry produces about 15 million finished bicycles annually
ASSOCHAM has batted for reduction in excise
duty imposed on bicycles to support the industry and reduce the excess burden.
For more details
The Associated
Chambers of Commerce and Industry of India (ASSOCHAM)
5, Sardar Patel Marg,
Chanakyapuri,
New Delhi- 110 021
Tel: 011 - 4655 0555. Fax:-011- 4653 6481, 011- 4653 6482, 011- 4653 6498
E-mail:
assocham@nic.in ,website: www.assocham.org
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