Ludhiana bi-cycle industry turning sick as Chinese dumps parts through SAFTA
Updated: Mar 13, 2014 01:31:15pm
Ludhiana, Mar 13 (KNN) More and more small units manufacturing bi- cycle parts here are turning sick due to severe loss being faced by the local industry due to import of Chinese goods through South Asian Free Trade Areas (SAFTA) route, mostly Nepal , Bangladesh and Sri Lanka.
There have been several rounds of meetings of the local cycle parts manufacturers with the officials of central government, the last meeting held two months ago, with no result so far.
SAFTA is a regional co-operation agreement signed between the member countries of SAARC (Bangladesh, Bhutan, India, Maldives, Nepal, Pakistan, Sri Lanka and Afghanistan), with the commitment to strengthen intra-SAARC economic cooperation.
The local manufacturers are very upset that the central government is not taking any action on the entry of Chinese goods through the SAFTA route into India, which is killing their business, President of United Cycle and Parts Manufacturers Association, Gurmeet Singh Kular told KNN.
These products are also produced in Ludhiana but the Chinese goods being much cheaper are being preferred over our products, he said.
Kular said, “There have been meetings between the manufacturers and officials of central government but so far no conclusion has come out.
"China is misusing the SAFTA route and causing severe loss to the local Ludhiana industry. The government should take effective steps to stop import of Chinese goods through Bangladesh, Sri Lanka, Taiwan and some more countries"
"The import duty on cycle parts from China is 20 per cent and assembled cycles is 30 per cent" said Kular, “so it’s taking the SAFTA route to export its products to India.
However, the cycle traders are benefiting by importing cycle parts from these SAFTA countries unlike the manufacturers.
“They are getting hi-tech products at a cheaper rate which they can sell with a good margin. So they are doing good business,” he said.
“Producing the same products in India involves very high cost due to lack of technology and unavailability of raw materials like Titanium, Magnesium, Carbon etc,” Kular said.
"The imports of cycle parts from China have reached Rs 900 crore from China and exports have come down to Rs 600 crore,” he said.
About 40,000-50,000 cycles per day are manufactured in Ludhiana alone. The city is home to over 3,500-4,000 MSMEs that make cycles and cycle parts, providing employment to about 250,000 people.
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.
Hundreds of units have shut operations due to this and some of them have diversified into other areas. (KNN/SD)
There have been several rounds of meetings of the local cycle parts manufacturers with the officials of central government, the last meeting held two months ago, with no result so far.
SAFTA is a regional co-operation agreement signed between the member countries of SAARC (Bangladesh, Bhutan, India, Maldives, Nepal, Pakistan, Sri Lanka and Afghanistan), with the commitment to strengthen intra-SAARC economic cooperation.
The local manufacturers are very upset that the central government is not taking any action on the entry of Chinese goods through the SAFTA route into India, which is killing their business, President of United Cycle and Parts Manufacturers Association, Gurmeet Singh Kular told KNN.
These products are also produced in Ludhiana but the Chinese goods being much cheaper are being preferred over our products, he said.
Kular said, “There have been meetings between the manufacturers and officials of central government but so far no conclusion has come out.
"China is misusing the SAFTA route and causing severe loss to the local Ludhiana industry. The government should take effective steps to stop import of Chinese goods through Bangladesh, Sri Lanka, Taiwan and some more countries"
"The import duty on cycle parts from China is 20 per cent and assembled cycles is 30 per cent" said Kular, “so it’s taking the SAFTA route to export its products to India.
However, the cycle traders are benefiting by importing cycle parts from these SAFTA countries unlike the manufacturers.
“They are getting hi-tech products at a cheaper rate which they can sell with a good margin. So they are doing good business,” he said.
“Producing the same products in India involves very high cost due to lack of technology and unavailability of raw materials like Titanium, Magnesium, Carbon etc,” Kular said.
"The imports of cycle parts from China have reached Rs 900 crore from China and exports have come down to Rs 600 crore,” he said.
About 40,000-50,000 cycles per day are manufactured in Ludhiana alone. The city is home to over 3,500-4,000 MSMEs that make cycles and cycle parts, providing employment to about 250,000 people.
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.
Hundreds of units have shut operations due to this and some of them have diversified into other areas. (KNN/SD)
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