Weak rupee effect: Imported bicycles to cost 10% more
Imported bicycles are set to get dearer soon with importers deciding to hike prices of bicycles, including of high-end ones, by at least 10 percent in the wake of depreciation of the rupee against the dollar.
Chandigarh: Imported bicycles are set to get dearer soon with importers deciding to hike prices of bicycles, including of high-end ones, by at least 10 percent in the wake of depreciation of the rupee against the dollar.
"Definitely, there is going to be a hike in prices of imported bicycles in view of the weakening of rupee. There will be a 10 percent increase in prices of bicycles," LA Sovereign, MD, Rohit Kalra told PTI.
Expressing concern over the Centre's policies for not being able to contain spiralling increase in dollar versus rupee, Kalra said his company had to make payment at the current rate of 63-64 for orders, which were booked when the rupee was 55 against dollar.
LA Sovereign Bicycles is one of the largest importers of bicycles which imports from China, Thailand and Sri Lanka. Price range starts from Rs 6,000 and goes up till Rs 2 lakh a bicycle.
Bicycle importers said the price hike may affect the demand of bicycles which are priced below Rs 10,000. "There will not be any effect on demand for bicycles which are priced above Rs 10,000," Kalra said.
"We will again raise prices of imported bicycles in the range of Rs 500-1,000 a unit because of wide currency fluctuations," Hi-Bird Cycles, MD, R D Sharma said while adding that company last month raised prices by Rs 500-600 a bicycle.
India is gradually becoming a growing market for imported bicycles in the wake of increase in demand for high end bicycles. The market for high-end imported bicycles is pegged at 1 lakh units in the country, said industry insiders.
Importers source high-end aluminium or carbon-based bicycles from countries including China and Taiwan. Besides, several bicycle components like basket, spoke, hub-cup, steel balls, free wheel, brakes etc are also imported.
The country's annual import of bicycles and bicycle parts is estimated to be Rs 1,200 crore, as per bicycle makers.
However, industry experts see weakening of rupee as an opportunity for domestic bicycle manufacturers, saying that high cost of import would force importers to source bicycle parts from local sources only.
"Industry should take it as an opportunity and step up efforts to meet the requirements of importers here by producing cost effective items," said Satish Dhanda, Convener Bicycle Panel, Engineering Export Promotion Council (EEPC).
Notably, last year the Centre raised the basic custom duty on bicycles from 10 to 30 percent and on bicycle components from 10 to 20 percent on to discourage imports.
Ludhiana is major hub of bicycle cluster as it caters to country's over 90 percent bicycle and bicycle parts needs.