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Posted at: May 10, 2016, 1:51 AM; last updated: May 10, 2016, 1:51 AM (IST)

Cycle Valley project gives local industrialists the jitters

Manufacturers apprehend that int’l players will ruin small units

Old wine in new bottle

  • Sources said the Cycle Valley would be established at Dhanansu village, which was declared as Focal Point (Industrial Area) last year. However, Dhanansu failed to attract investors due to the high land prices there. The sources added that the Focal Point at Dhanansu village would be projected as the Cycle Valley to attract buyers.

‘A lot more needs to be done’

  • }Merely setting up a Cycle Valley is not enough. A lot needs to be done for the local cycle industry to make it capable to compete with China. First, China is selling steel at half the price as compared to the Indian market. The Chinese government has imposed only 4% taxes on such products whereas here we are paying nearly 12% tax. — Badish K Jindal, chairman,FASII

Mohit Khanna

Tribune News Service

Ludhiana, May 9

The announcement by Deputy Chief Minister Sukhbir Singh Badal of setting up the world’s largest high-end and electric bicycle manufacturing facility in Ludhiana has failed to bring any cheer to the local cycle industry.

The industrialists feel that establishing a cycle valley is not enough and that a lot needs to be done to revive the cycle industry which is passing through a lean patch. Besides the announcement of setting up a cycle village has also generated fear among the local cycle manufacturers as they apprehend that major international players would ruin the small scale industry of this town.

Known as cycle valley, with a promise of producing 15 million bicycles, would be established in Ludhiana over an area of 300 acres.

Badish K Jindal, Chairman of the Federation of Association of Small Industries of India (FASII), said, “Merely setting up a Cycle Valley is not enough. A lot needs to be done for the local cycle industry to make it capable to compete with China. First, China is selling steel at half the price as compared to the Indian market. The Chinese government has imposed only four per cent taxes on such products whereas here we are paying nearly 12 per cent tax. They despite being a Communist country China has very flexible labour laws whereas here the labour laws are stringent.”

The State government claims that the proposed facility is likely to give a boost to bicycle exports from $1 billion at present to $5 billion. The proposed Cycle Valley would also have a high-tech testing laboratory to ensure that the bicycles meet European standards, besides a cycle-testing track.

Hero Cycles chairman Pankaj Munjal had opined that the new project would give further impetus and would ensure tremendous growth in bicycle exports.

Former Chairman of the Confederation of Indian Industry (CII) SS Bhogal, who was working in coordination with the Deputy CM till last year, said, “The initiative is encouraging for some but it has also created apprehensions among the local small scale sector. They fear that the setting up of cycle village will adversely affect the local industry. Except few industrial units, others do not have the wherewithal to venture into the high-end bicycle industry. Components like high-tech multi-speed gears, chain wheels, shock absorbers, lightweight alloy aluminium frame and reflectors are a challenge for the local industry. The idea was to boost the local industry and progress towards high-tech manufacturing of components. But we are starting from the very top.”

Bhogal added that establishing a cycle valley would not be enough. “The government of the day has a lot of challenges ahead. Purchasing land in Punjab is not an easy task and it should be ensured that land is available at affordable price. Then there is an acute shortage of skilled labour. Further, cycle valley should benefit the local industry,” said Bhogal.

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