The inclusion of bicycle and bicycle parts in India’s Regional Comprehensive Economic Partnership (RCEP) negotiations, which propose to extend free trade agreements to China, will excessively harm the local industry by opening the floodgates to Chinese imports.
India is the second-largest bicycle producing nation after China.
Industry captains and experts have called on the government to “exercise caution” while finalising the multilateral trade agreement, stating that the challenges for the bicycle industry are likely to compound if bicycles aren’t excluded from the list, given that a significant volume of the imports are from China.
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“Chinese bicycle and parts, which are already a threat to the domestic industry as they are cheaper by 15-20 per cent as compared to products manufactured in India, will become even cheaper if free trade is allowed through the RCEP window,” said Gurmeet Singh Kular, president, Federation of Industrial and Commercial Organisation. At a time when the industry is already facing a slowdown like never before, the
RCEP agreement, if sealed, will mean disaster for the industry and “we will be fully destroyed,” he said.
Members of United Cycle and Parts Manufacturers Association (UCPMA) had held an emergency meeting on Wednesday to chalk out an action plan oppose India’s signing of RCEP treaty. The treaty, once signed, will enable at least 16 countries including China eligible to export goods on nominal or zero customs duty to India, they added.
Expressing concern over China pushing hard to “dump” its surplus bicycles in India, UCPMA president D S Chawla noted, “Our main problem is China, from where cheap and inferior quality bicycles and parts are pushed into India through unfair means of preferential market, like the South Asian Free Trade Agreement and under-invoicing. The consistent rise in Chinese imports via Bangladesh and Sri Lanka on zero import duty in India is devastating for us.”
The Indian bicycle manufacturing and bicycle components industry is recognised globally for its distinct quality standards and variety. The country produces nearly 1.5 crore bicycles every year.
Today, however, the industry is in deep crisis due to increasing cheap imports from Bangladesh, Sri Lanka, China and low-cost South-East Asian countries.