Bicycle prices set to rise by Rs 20-25

The Indian bicycle industry today hinted at a marginal increase of 1.5-2 per cent in the prices of bicycles following reimposition of 5 per cent custom duty on melting steel scrap.

In the Budget presented yesterday by Finance Minister P Chidambaram, the government reimposed 5 per cent Customs duty on melting steel scrap, which was withdrawn in 2004-05.

"The price of bicycles will certainly increase by Rs 20-25 per unit, on account of the levy of 5 per cent Customs duty on scrap announced in this Budget, as it will directly impact our input costs," Indian Bicycle Manufacturers Association President Satish Dhanda said here hoping that the industry would go in for revision of prices within a month.

After the announcement, the prices of scrap, ingot, sponge iron and rolled products in the Punjab steel industry had jumped by Rs 500-700 per tonne, he said.

The prices of scrap increased to Rs 17,200 per tonne, up by Rs 700 per tonne while the price of ingot and other rolled products, which are key input for bicycle industry, had swelled to Rs 21,500 and Rs 24,000 per tonne, respectively.

"This move of the government will hit the steel industry of the state quite hard as it will increase the input cost," North India Induction Furnaces Association President K K Garg said, adding it would hamper the industry as it was largely dependent on imported scrap for their consumption in order to meet industry requirements.