Punjab and Haryana bicycle manufacturers want the government to impose an anti-dumping duty on imports of Chinese cycle parts to save domestic industry.
The industrial hub of Punjab at Ludhiana and few units at Sonepat in Haryana fulfill 90% of total demand for bicycles in the country. There are about 4,500 bicycle manufacturing units in Ludhiana and a few old industrial houses engaged in cycle manufacturing at Sonepat in Haryana.
The cycle industry wants a 35%anti-dumping duty on cycle parts imported from China saying that the measure was necessary to offset the indirect subsidy that China offers to its industry by way of a fixed exchange rate. The cycle manufacturers say that the cycle units had been hit hard due to appreciation of rupee and cost competitiveness eroding due to fixed rate of exchange for Chinese currency vis-a-vis dollar.
A cross section of bicycle manufacturers told FE that as against a cycle manufactured by domestic unit costing Rs 1000 a Chinese cycle costs not more than Rs 700. Little doubt that local cycle traders have started preferring Chinese cycles to the local ones.
Explaining the rationale behind preference for Chinese imports, the cycle manufacturers told FE that ?while importing cycles from China one has to pay about Rs 47,000 as freight charges for a full consignment but one has to pay about Rs 90,000 if one gets a similar consignment from Ludhiana because shipment charges are almost half than the freight charges. In addition one has to pay local taxes on every cycle purchased from the domestic market?.
Ludhiana alone receives at least 100 containers of Chinese cycle spares every month at its dry port, including parts like hubs, chains, wheels, cranks, handle levers, pedals, pumps, axles etc. Result was fall in the export of parts from Ludhiana which used to be of the value of about Rs 1000 crores three years ago to Rs 500 crores at present and Chinese imports rising even in a sharper pattern from Rs 200 crores to Rs 1,000 crores during the same period.
Talking to FE office bearers of Asia?s largest cycle manufacturers Association, United Cycle and Parts Manufacturers Association have demanded a complete ban on the import of cycles and cycle parts from China. DS Chawla, president of United Cycle and Parts Manufacturers Association observed that ?the government should save the domestic cycle industry from closure by imposing anti-dumping duty. The Government should impose a complete ban on imports from China?.
Chawla commented that ?bicycle manufacturers in the SME sector would be forced to shut production or diversify into other business if government fails to impose anti-dumping duty on import of Chinese cycle parts immediately?.