Cheap Imports Threaten Bicycle Industry

MSME items such as cycles must be kept out of RCEP talks. Chinese cycle imports via Lanka, Bangladesh should be curbed

- Suranjan Gupta & Surendar Singh

The Indian bicycle industry plays an important role in the growth, development, and expansion of the Micro, Small Medium and Enterprise (MSME) sector. India is the second-largest producer of bicycles, next only to China, and manufactures around 1.5 crore bicycles every year. The Indian bicycle manufacturing and bicycle components industry is widely recognized for its distinct quality standards and variety in the global market.

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. The total imports of bicycles, bicycle parts and components increased to $862 million in 2018 from $637 million in 2011. Half of the total imports are from China and Japan. However, a recent surge in imports from Bangladesh and Sri Lanka has emerged as a major threat to the Indian bicycle industry.

The given chart analyses the imports falling under HSN code 87120010 (bicycles and other cycles, including delivery tricycles, not motorized) from Bangladesh and Sri Lanka.

It is important to note that India’s imports from Bangladesh were $0.14 million in 2011, which rose to $5 million in 2018, reflecting a CAGR of 66.17 percent. Similarly, India’s imports from Sri Lanka were $1.01 million in 2011 and reached $22 million in 2018, indicating a CAGR of 55.44 percent.

Contributing factors

This raises a fundamental question on the factors that could have contributed to the consistent rise in imports in this specific product category from Bangladesh and Sri Lanka.