Raise import duty on bicycle: FASII

Federation of Associations of Small Industries of India (FASII) has sought from Union Finance Ministry to raise import duty on bicycle and parts, introduce technology upgradation fund for domestic bicycle sector and abolish excise duty on bicycles.
Noting that "unhindered" import of bicycle has adversely hit domestic bicycle manufacturing, FASII accused some unscrupulous importers of importing bicycles by indulging in under invoicing in order to avoid payment of import duty imposed on bicycle.
"Countries like China are dumping bicycles in India as some of importers are bringing items by showing their lower value in bills in order to escape from paying duties. This practice has hit the domestic bicycle sector hard," FASII, President Badish Jindal said in a memorandum submitted to Union Finance Minister Arun Jaitley during pre-budget meeting.

Jindal suggested that the Centre should impose 40 per cent import duty on bicycle and parts to curb "flooding" of bicycles.
He further said the floor price could also be fixed for bicycle and parts for the purpose of working out import duty on the same.
To keep a check on "flooding" of Chinese bicycles, the Centre had raised import duty on bicycle parts and components from 10 to 20 per cent and on "fully built" bicycles from 10 to 30 per cent.

Dependency on Chinese bicycle and parts have grown over the years as import has risen from Rs 1,600 crore in 2010-11 to Rs 2,200-2,500 crore in the last fiscal, said Jindal.

Indian manufacturers are heavily dependent on China for several high-end bicycles and parts like basket, spoke, air-pumps, hub-cup, hub-kone, carrier, bicycle chain, handle bolt, brakes among other items.
He also demanded that the Centre should withdraw 2 per cent excise duty on bicycle in order to promote this eco- friendly mode of transportation.
"As such, the duty of 2 per cent should be abolished as in our estimate it may not fetch more than Rs 50 crore to the government ," he said.
FASII also sought creation of technology upgradation fund for bicycle sector in order to keep the domestic manufacturer abreast of latest technology which can be incorporated in its making.

Jindal also sought lending rates for MSME sector on par with farm sector to boost small and medium scale enterprises in the country.
"Credit availability at cheaper rate to MSME sector is vital for enabling this sector to fight competition and sustain itself. Interest rates for MSMEs should be 2 per cent below that of large enterprises or on par with agricultural sector," he said.