Punjab Deputy Chief Minister Sukhbir Singh Badal’s announcement to establish the world’s biggest Cycle Valley in Ludhiana does not seem to have enthused many in the industry. A section of cycle industry players has welcome the move, but those operating at a micro and small scale feel that there is an urgent need to save the industry from Chinese threat. DAILYPOST Correspondent AMARPREET SINGH MAKKAR delves deep into the issues haunting the cycle industry and pros and cons of developing the Cycle Valley in India’s Manchester.
Deputy Chief Minister Sukhbir Singh Badal has infused a new lease of life by sharing the fact that his government is keen to set up the world’s biggest Cycle Valley in Ludhiana, the hub of India’s bicycle industry. What has not been liked by all is the fact that the Valley dream will come true but with the support of Chinese industry players, who have left nothing unturned to break the bone of India’s cycle industry by dumping cheaper parts, which are used in manufacturing cycles. Local vendors are not only feeling the pinch, but are literally on the verge of closure if they do not get life-saving interventions from the government.
Deputy Chief Minister Badal has, however, assured the state’s cycle manufacturers all possible help, but everyone is keeping his fingers crossed vis-à-vis their future and that of the government’s ambitious Cycle Valley project. The state government has set aside almost 300 acres of land on the outskirts of Ludhiana for the grand project, a centralised facility for manufacturing bicycles. During his recent visit to Shanghai, the Deputy Chief Minister along with top officials held meeting with 30 cycle manufactures and discussed pros and cons of establishing the Cycle Valley.
During the meeting at Shanghai, around 30 top cycle manufacturers from across the world and around 70 big and small manufacturers from Ludhiana also participated in the 26th China International Bicycle and Motor Fair, where Chinese companies exhibited their latest innovation in technologies being used by them to manufacture bicycles. So far as Punjab’s cycle industry is concerned, there is a need for laying extra emphasis on research and analysis (R&D), which is currently missing, resulting in the absence of technological edge over China, which is fast spreading its tentacles in global market.
Recently the Deputy Chief Minister Badal revealed that efforts to invite investments have started bearing fruits. TI India, a Chennai-based cycle manufacturing company, is opening its next manufacturing unit in Punjab. “TI India is coming up with its largest manufacturing unit at Rajpura, which will be spread in an area of 60 acres of land,” said Badal. TI India had also participated in the conference held at Shanghai. Deputy Chief Minister has promised quick support to all those who wish to set up any unit in the proposed Cycle Valley, which is seen as an attempt to increase the export figure to US $5 billion in the high-end bicycle segment.
Need For Cycle Valley
Punjab already leads the country in cycle manufacturing but now the need of high-end bicycle has caught the imagination of new customers. However, the state’s existing players need to be suitably equipped with technical know-how to capitalise on the emerging market of high-end cycles. A high-end bicycle costs not less than Rs 1 lakh and is becoming fairly popular in Europe as more and more people are taking to cycling to stay fit and fine. “Cycle Valley will be the answer to high-end bicycles,” said a manufacturer in Ludhiana. Moreover, the Valley will generate jobs for 1.5 lakh people, which will go up to 4.5 lakh once the Valley’s potential is fully utilised.
FSSII president SPEAKS
Badish Jindal, president, Federation of Small-Scale Industries of India (FSSII), who has given a representation to Secretary, Micro, Small and Medium (MSME) Enterprises Department, Government of India, on how to save India’s cycle industry, feels that the business trips of industry players for China should not be subsidised. “On one hand, industrialists are protesting against imposing anti-dumping duty on Chinese parts, and on the other, they are visiting China after getting subsidy from the Central government. Most of the times, they bring imported bicycle parts,” he said.
Cycle Industry At A Glance
Cycle industry in Punjab is mainly confined to Ludhiana where 1.40 crore cycles are manufactured every year. Major cycle manufacturing units are Hero, Avon and others, which are situated in Ludhiana. These units manufacture up to 40 lakh bicycles per year. Most of small scale and micro industries depend on big manufacturing houses and supply parts to them. Over 1 lakh people are directly and indirectly employed in cycle industry. Ludhiana’s cycle industry also exports bicycles to other countries apart from catering to domestic needs.
Worries Of Cycle Manufacturers
Though the leading cycle manufacturers have welcomed the decision of state government to seek foreign investments in Cycle Valley, small scale and medium industry players see the Cycle Valley as a threat to them. Balbir Singh, a cycle industrialist, feels that already the Chinese players are giving a tough ‘competition to us. I do not think the idea of inviting them to set-up units in Ludhiana will do any good to us.”Singh fears that the step will be detrimental to small and micro industry units and leave several people unemployed. Singh’s concerns are not unfounded. Already 45 per cent of bicycle parts are coming from China and if the Chinese companies invest in this valley, they will import more parts and kill the local small industry.
Another cycle industrialist Jatinderpal Singh said that the government should take steps to reduce import of Chinese parts to save the existing units and avoid inviting foreign industry to Punjab. Jaswinder Singh, also president of small scale industry units’ local body, says a number of small units have already become mere trading units, which will get a finishing if Punjab government persists with the idea of getting foreign investments.
Technology, Not Foreign Investors Needed
It is technology which Punjab’s cycle manufacturers are craving for. They feel that once they are equipped with latest technology, they will be able to compete with their foreign counterparts against all odds. Their concern is technological upgradation and not foreign investments. “There is a need to cut the percentage of imports from China to stay afloat in global market, for which technological upgradation has become the need of the hour,” they claim.
Manufacturers maintain that 50 per cent of cycle parts are already being imported from China, which is attributable to the absence of technological advancement in cycle industry. Pricing is another issue. Cycle parts imported from China are much cheaper as compared to what is manufactured in India. The Chinese cycle parts worth over Rs 1,000 crore are being traded in India annually.
Pritpal Singh, who is associated with the cycle industry, says: “Instead of bringing investments, the government should focus on bringing technology and empower the state’s existing industry.” Rohit Kumar of Focal Point said that in the past no government or any department had taken any initiative to bring technology from developed countries. “If the existing industries get better technology than these can compete with their Chinese counterpart,” he added.
Other Areas Of Concerns
The demand for bicycle has gone up due to the newly introduced welfare schemes by various states. As a result, Chinese firms too have become proactive in promoting their products.
According to an estimate, of around 13.5 million bicycles manufactured in the country annually, a chunk of them is manufactured in Ludhiana. To maintain this figure, there is a need for technological upgradation, which is currently missing.
The cycle manufacturers are facing problems due to fluctuating prices of the raw materials. The government is not providing sufficient funds to the industry. Labour shortage, in particular of skilled ones, remains a serious concern.
Many small cycle manufacturing units unable to cope up with shortage of labourers have shut their units. Cheap imports of bicycles and bicycle parts from China are also contributing to the problems of bicycle manufacturers. The high level of imports from China is hitting the domestic industry, particularly the manufacturers of bicycle parts.
Pros and Cons of Cycle Valley
The proposed cycle valley will prove beneficial to industry as all parts will be manufactured under one roof.
Around two lakh persons will get jobs in cycle manufacturing units to be established in Cycle Valley.
New technology will be brought to India, which will help in manufacturing high-end bicycles.
Local industry, however, fears the cycle industry may become the monopoly of a few select big companies.
Existing small and micro units will suffer a major setback.
Labourers who are not well trained and are working in small and micro units may lose their jobs.
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