 "Ludhiana cycle parts makers hit by cheap Chinese imports")
The Rs 6,000 crore bicycle and bicycle parts industry of Ludhiana has been hit hard by rising imports of relatively cheap cycle parts from China. Insiders said even the established players are importing components and having them assembled in Ludhiana.
According to department of commerce data, provided by the Federation of Indian Export Organisations (FIEO), bicycle parts imports in 2012-13 totalled $485.23 million (Rs 2,765.64 crore, based on $1 = Rs 57), while bicycle imports totalled $33.73 million (Rs 192.09 crore), mainly comprising high-end bicycles.
About 40,000-50,000 cycles per day are manufactured in Ludhiana alone. The city is home to over 3,500-4,000 micro, small and medium enterprises (MSMEs) that make cycle and cycle parts, providing employment to about 250,000 people. Industrialists and cycle associations admitted that the cycle and cycle parts industry has seen the closure of several units, while others are finding it tough to stay afloat.
He added, "There are over 16-20 parts which are being imported from China, like spokes, baskets, hub cones, chains, chain wheels and cranks, steel balls, plastic handle levers, saddle parts, pumps and cables. These items are cheaper than Indian manufactures. As a result, imports are increasing by the day, and many cycle manufacturers are importing these parts rather than procuring them from the domestic market."
Industry insiders said that in the recent past some 200 units have shut operations and some of them have diversified into other areas. "We closed operations around two years ago, as the business was not viable," said Rajkumar Bagga, proprietor of Bagga Industries, a former manufacturer of brake parts and cables.
"I used to make cycle chains but the business is no longer lucrative, as customers prefer buying cheap Chinese products. A majority of the cycle parts are now imported from China," said Pargat Singh, a manufacturer of cycle chains.
Singh also said that the Central government, concerned over the impact of Chinese imports on the cycle and parts manufacturing industry in Ludhiana, would shortly conduct a survey on the issue, to assess the loss in sales of bicycles and their parts manufactured in India.
"As a part of the survey, the officials of National Small Industries Corporation (NSIC) will soon start assessing the impact of Chinese imports on the Indian bicycle industry," he said. The NSIC had called a meeting of representatives of cycle industry at the office of the UCPMA in Ludhiana recently.
Vishvkarma added, "We had suggested that the government should increase the import duty on cycle parts and cycles. We have asked them to increase it by 10 per cent." Currently, the import duty on cycle parts is 20 per cent, while on cycles it is 30 per cent.
According to department of commerce data, provided by the Federation of Indian Export Organisations (FIEO), bicycle parts imports in 2012-13 totalled $485.23 million (Rs 2,765.64 crore, based on $1 = Rs 57), while bicycle imports totalled $33.73 million (Rs 192.09 crore), mainly comprising high-end bicycles.
About 40,000-50,000 cycles per day are manufactured in Ludhiana alone. The city is home to over 3,500-4,000 micro, small and medium enterprises (MSMEs) that make cycle and cycle parts, providing employment to about 250,000 people. Industrialists and cycle associations admitted that the cycle and cycle parts industry has seen the closure of several units, while others are finding it tough to stay afloat.
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The president of the United Cycle and Parts Manufacturers Association (UCPMA), Charanjit Singh Vishvkarma, told Business Standard, "Imports of cycle parts have affected the Ludhiana cycle parts industry. The cheaper imports from China are ruling the domestic market. Even on the export front, the picture is not very rosy. Six years back, our exports used to be around Rs 1,200-1,500 crore, but this has come down to around Rs 600 crore." The UCPMA is the largest association of cycle and cycle parts manufacturers in Asia.
He added, "There are over 16-20 parts which are being imported from China, like spokes, baskets, hub cones, chains, chain wheels and cranks, steel balls, plastic handle levers, saddle parts, pumps and cables. These items are cheaper than Indian manufactures. As a result, imports are increasing by the day, and many cycle manufacturers are importing these parts rather than procuring them from the domestic market."
Industry insiders said that in the recent past some 200 units have shut operations and some of them have diversified into other areas. "We closed operations around two years ago, as the business was not viable," said Rajkumar Bagga, proprietor of Bagga Industries, a former manufacturer of brake parts and cables.
"I used to make cycle chains but the business is no longer lucrative, as customers prefer buying cheap Chinese products. A majority of the cycle parts are now imported from China," said Pargat Singh, a manufacturer of cycle chains.
Singh also said that the Central government, concerned over the impact of Chinese imports on the cycle and parts manufacturing industry in Ludhiana, would shortly conduct a survey on the issue, to assess the loss in sales of bicycles and their parts manufactured in India.
"As a part of the survey, the officials of National Small Industries Corporation (NSIC) will soon start assessing the impact of Chinese imports on the Indian bicycle industry," he said. The NSIC had called a meeting of representatives of cycle industry at the office of the UCPMA in Ludhiana recently.
Vishvkarma added, "We had suggested that the government should increase the import duty on cycle parts and cycles. We have asked them to increase it by 10 per cent." Currently, the import duty on cycle parts is 20 per cent, while on cycles it is 30 per cent.