Punjab Deputy Chief Minister Sukhbir Singh Badal continued to spruik the establishment of a ‘cycle valley’ in the district of Ludhiana after a joint meeting of the national bicycle associations of India and China at the 2016 China Cycle exhibition held over the weekend.
“We are the world leader in manufacturing the common man’s cycle, but now the demand is for high-end as well as electric cycles,” said Sukhbir on Monday, following the meeting attended by his Government delegation and industry members from India and China, which included Ma Zhongchao, China Bicycle Association Chairman. “We are inviting world players to set up shops in Punjab. The local industry will also be benefitted as we are requesting them to tie-up with world manufacturers for providing ancillary support.
“We expect Punjab to become a hub for export of high end bicycles as creation of a unique eco system will result in a reduction of costs by up to 20 per cent. Industry will benefit due to manufacturing units and ancillaries being housed in one location.
“We are offering pre cleared sites to all investors along with quick clearances and I assure you will have no problem in setting up shop in Punjab as it has been rated as number one in ease of doing business in India”.
Local manufacturers such as Hero Group, TI Cycles and Avon Cycles are all said to be planning new facilities in the development, for which more than 300 acres is being set aside. Hero Cycles will reportedly be an anchor client and strategic partner, signalling a change of tune from earlier this year when the company’s Chairman Pankaj Munjal said “we have had meetings with the Punjab government functionaries, but we realised that the eco-system for setting up a high-end bicycle manufacturing plant is not there in Punjab.”
To date, India’s bicycle manufacturers have been primarily focused on low-priced products for the local and regional market, but capturing a larger share of the European market will be the focus of the new venture. Sukhbir hopes that luring Chinese expertise and investment into the area will elevate the competencies and capabilities of local industry.
“There is an emerging market for high-end cycles across the world,” said Sukhbir to the Hindustan Times ahead of the exhibition in Shanghai. “These cost over Rs 1 lakh (USD1’500) each and are becoming fairly popular in Europe as more and more people are taking to cycling. We are targeting that market.”
Not everyone is convinced by the idea though, with several members of industry and commerce bodies cautioning that any partnership between India’s and China’s bicycle industries could be lop-sided in favour of the Chinese.
“On the one hand, industrialists are protesting against imposing anti-dumping duty on Chinese parts, and on the other hand, they are visiting China after getting (a) subsidy from the Government of India,” said Badish Jindal, President of the Federation of Small-Scale Industries of India (FASII). “Most of the times, they bring imported bicycle parts; I have not seen any technology transfer. These trips are killing our own industry.
“Merely setting up a Cycle Valley is not enough,” he added, in a separate interview with The Tribune. “A lot needs to be done for the local cycle industry to make it capable to compete with China. First, China is selling steel at half the price as compared to the Indian market. The Chinese government has imposed only four per cent taxes on such products whereas here we are paying nearly 12 per cent tax. They despite being a Communist country China has very flexible labour laws whereas here the labour laws are stringent.”
“We will oppose this tooth and nail,” said Avtar Singh, president of Chamber of Industrial and Commercial Undertakings. “Big players of Ludhiana have already increased Chinese parts imports due to which many bicycle manufacturing units have shut shop. This step will further push the small players out of competition.”
“The initiative is encouraging for some but it has also created apprehensions among the local small scale sector,” said Confederation of Indian Industry (CII) former Chairman SS Bhogal. “They fear that the setting up of cycle village will adversely affect the local industry. Except few industrial units, others do not have the wherewithal to venture into the high-end bicycle industry. Components like high-tech multi-speed gears, chain wheels, shock absorbers, lightweight alloy aluminium frame and reflectors are a challenge for the local industry. The idea was to boost the local industry and progress towards high-tech manufacturing of components. But we are starting from the very top.”
Hero Cycles’ Munjal told the gathering in Shanghai that a US-based University would assist with the design of the manufacturing zone, which would also feature testing facilities to ensure bicycles built for export met EU norms. Munjal also announced that the recently-formed Asian Bicycle Alliance would hold its annual conference in Punjab this December.