Chandigarh: Disappointed at not getting incentives like relief on excise duty front in Budget, bicycle manufacturers here today said they have no option but to raise prices by 4-5 per cent within next fortnight due to spiralling input cost. Bicycle manufacturers had delayed the price hike as they were expecting rollback of two per cent excise duty on bicycle in Union Budget, which was presented by Union Finance Minister P Chidambaram. The hike in duty was imposed last year's Budget.
"We will increase bicycle price by 4-5 per cent," Avon Cycles MD, Onkar Singh Pahwa told PTI today. Pahwa said the bicycle industry was upset as their hopes of withdrawal of excise duty were dashed in the Union Budget today. "We were waiting for the budget. The bicycle industry was expecting that the Budget will bring some relief in shape of withdrawal of excise duty on bicycle. But it did not happen. So, we have now left with no option except to raise bicycle rates," he said.
Bicycle industry had not increased bicycle prices during the last 10 months despite its input cost, including diesel, power, labour, freight going upward. The starting price of bicycle hovers around Rs 2,800 a unit. In Union Budget 2012-13, the excise duty on bicycle was raised from one per cent to two per cent. Bicycle sector is also paying excise duty of 12.36 per cent on raw material.
The bicycle industry was expecting that the Budget will bring some relief in shape of withdrawal of excise duty on bicycle.
United Cycles & Parts Manufacturers Association (UCPMA), President, Gurmeet Singh Kular said the industry had even met Prime Minister Manmohan Singh, seeking rollback of excise duty on bicycle, considered as poor man's mode of transport. Industry had suggested that the Centre should reduce excise duty in raw material to 4 per cent and bring down duty on bicycle from 2 per cent to zero per cent.
"We will again meet Prime Minister and urge him to withdraw the excise duty on bicycle," said Kular. Bicycle makers have also been demanding anti-dumping duty on bicycle to curb the rising import of bicycles from China as bicycles and parts from that country have hit domestic manufacturers hard.
Indian manufacturers are heavily dependent on China for several bicycle parts like basket, spoke, hub-cup, hub-kone, carrier, bicycle chain, handle bolt, brakes, among others. Notably, some of Indian bicycle makers and exporters had
even set up their shops in China to import bicycle and parts to take advantage of lower rates.
Ludhiana caters to country s over 90 per cent bicycle and bicycle parts requirements and it houses prominent bicycle brands such as Hero Cycles, Avon Cycles, Hi-Bird etc.