Bicycle exports plummet to half
VISHAL SHARMA
New Delhi/ Agra. At a time when the bicycle industry of the country is growing at almost 10 per cent annually, the export of Indian bicycles has dropped to almost half the previous year's tally owing to a huge increase in steel prices in the past three months and an unstable dollar.
For the industry that exports almost Rs 1,000 crore worth of its production, the rising steel prices have caused a tremendous drop in exports, which are presently pegged at just around Rs 423 crore.
The bicycle manufacturers of the country held a bicycle trade fair in Agra last week. The spokesperson of the United Cycle & Parts Manufacturers Association, KK Seth, said the production of steel was being monopolised by a select group of companies in India who were manipulating steel prices.
In the past three months, the steel prices had shot up by Rs 3,000 per metric tonne and now the companies were again preparing to raise prices citing international market trends, he said.
As a result of high steel prices, he said, the Indian bicycles were losing to cheaper Chinese cycles, where the steel prices were fixed by the government every year.
Similarly, he said, the weakening dollar had also struck a huge blow on the bicycle exports. The exporters were reluctant to take orders at the rates quoted by them in dollars to their overseas clients earlier as supplying bicycles at the previously quoted rates would mean incurring a loss of up to 15 per cent.
While in 2005-06, the exports were worth Rs 950 crore, this year it was not expected to go beyond Rs 600 crore if the present trend continued, he said.
The Chinese government had a fixed exchange rate for the dollar, which gave the Chinese cycle manufacturers an advantage of quoting rates in dollars that were far lower than those quoted by their Indian counterparts, who were currently losing almost all export orders to the Chinese, Seth added.
For the industry that exports almost Rs 1,000 crore worth of its production, the rising steel prices have caused a tremendous drop in exports, which are presently pegged at just around Rs 423 crore.
The bicycle manufacturers of the country held a bicycle trade fair in Agra last week. The spokesperson of the United Cycle & Parts Manufacturers Association, KK Seth, said the production of steel was being monopolised by a select group of companies in India who were manipulating steel prices.
In the past three months, the steel prices had shot up by Rs 3,000 per metric tonne and now the companies were again preparing to raise prices citing international market trends, he said.
As a result of high steel prices, he said, the Indian bicycles were losing to cheaper Chinese cycles, where the steel prices were fixed by the government every year.
Similarly, he said, the weakening dollar had also struck a huge blow on the bicycle exports. The exporters were reluctant to take orders at the rates quoted by them in dollars to their overseas clients earlier as supplying bicycles at the previously quoted rates would mean incurring a loss of up to 15 per cent.
While in 2005-06, the exports were worth Rs 950 crore, this year it was not expected to go beyond Rs 600 crore if the present trend continued, he said.
The Chinese government had a fixed exchange rate for the dollar, which gave the Chinese cycle manufacturers an advantage of quoting rates in dollars that were far lower than those quoted by their Indian counterparts, who were currently losing almost all export orders to the Chinese, Seth added.
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