Chandigarh: Bicycle import into India from China will remain unhindered despite the Centre raising customs duty on bicycles and its parts as importers may indulge in 'under-invoicing', say bicycle makers.
   
"(Some) importers may involve in under-invoicing of bicycle import in order to neutralise the impact of hike in custom duty, which is a measure to protect the domestic bicycle manufacturing from large-scale import," Satish Dhanda, convener, bicycle panel, Engineering Export Promotion Council of India told on Friday.
   
Dhanda, who is also a Ludhiana-based bicycle manufacturer, called for the strict monitoring and adequate mechanism in place in order to prevent any 'illegal' practice in bicycle import.
   
Union Finance Minister Pranab Mukherjee in Budget 2012-13 proposed to enhance basic customs duty on bicycles from 10 percent to 30 percent and on bicycle parts from 10 percent to 20 percent.
   
Prices of imported bicycles will go up in proportion to increase in duty. The Price range of imported bicycles starts from Rs 5,000 to Rs 20,000 in Ludhiana.
   
Bicycle makers said that increase in custom duty might decrease the overall imported value of bicycles and its components but the quantum of import might not decrease.
   
The import of bicycle and parts from China surged from Rs 300 crore in 2008-09 to Rs 1,600 crore in the last fiscal that hitting the bicycle industry here.
   
Heavy import also had a negative impact on bicycle export as country’s bicycle shipments shrunk to Rs 650 crore in 2010-11 as against export of Rs 1,200 crore in 2008-09.

Indian bicycle makers are heavily dependent on China for several bicycle parts like basket, spoke, hub-cup, carrier, bicycle chain, handle bolt, brakes among other items.
   
Import of Chinese bicycle and parts flourished over the past few years because of huge price difference. Chinese bicycle and its parts are 30-35 percent cheaper than their respective prices in India.
   
"Even after involving landing cost, the rate difference still remains between 10-15 percent," said Dhanda.
   
Some of Indian bicycle makers and exporters have even set up their shops in China to import bicycle and its parts to take advantage of lower rates. Some of them have even reduced their own production and meeting requirement by importing into India, he added.
   
Bicycle makers also suggest that the export rate should be fixed as floor rate for levying custom duty on imported bicycles which would contain flooding of bicycles.
   
Ludhiana caters to country's over 90 percent of bicycle and its parts requirements.


(Agencies)