Wednesday, Dec 8 2021 | Time 09:27 Hrs(IST)
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Business Economy


Policy snub for e-cycles risks export loss of Rs 10,000 Cr by 2026 for Indian companies: Hero Cycles

New Delhi, Oct 4 (UNI) Disallowing policy benefits to e-cycles could lead to India losing Rs 10,000 crore worth export orders from Europe over the next five years, HMC group Chairman and Managing Director Pankaj Munjal has said.
In a statement, he said,“The EU levies a heavy anti-dumping tariff on e-bike imports from China that may go as high as 83 per cent. It has initiated a resultant re-shoring of e-bike production – in 2019, the estimated re-shored e-bike production was 930,000 units with countries like Portugal, Poland, France, Bulgaria, Italy and Romania grabbing more than 80 per cent of it. With quality products at a competitive price, Indian manufacturers are poised to grab this opportunity to secure the migrating business out of China and the encouraging response to our first batch of e-cycles delivered in June is a testament to it. However, we are losing out on the policy side that would have helped the industry to take advantage of the shrinking share of China and far-East as the suppliers of e-bikes to the EU – e- bicycles are conspicuous in their absence in the FAME II and PLI schemes despite several representations to the ministries concerned even as every electric vehicle, including e-scooters, e- motorcycles, e-cars, and e-buses, enjoying incentives under these schemes.''
He said he was afraid that the specific exclusion had a mass migration on the manufacturing value of around Rs 1,000 crore going up to Rs 3,000 crore in financial year 204 to the re-shored capability of the European Union.
In the next five years, India would lose a visible pipeline of Rs 10,000 crore worth of export orders of e-bicycles if the re-shored capability of the EU managed to secure the migrating business out of China instead of India,” he said.
Mr Munjal further said, “The e-bikes market in the EU is valued at € 5 billion, 50 times that of India. E-bike sales in Europe are expected to grow 5 times in the next decade at a CAGR of 16 percent. India has the second largest bicycle making capability in the world and lower import duty would help to increase export to the UK.''
''Generalized systems of preferences (GSP) benefits are given to many Indian products in the UK but not to bicycles that attract import duty of 14 percent. Therefore, to compete against the least developed countries (LDCs) and GSP countries enjoying zero import duties in the UK and to remain competitive globally, India must negotiate and lock a deal to bring down the import duties on bicycle to the level of LDC and GSP countries which is zero per cent from existing 14 percent,” he said.
Hero Cycles leads bicycle production globally. It started manufacturing electric bicycles three years ago.
Following the Make-in-India initiative, the company invested more than Rs 300 crore in a new state-of-the-art factory to manufacture e-bicycles. It also invested Rs 400 crore through its vendor base and another Rs 300 crore in the UK for exporting to international markets to grab the lion’s share of migrating e-bicycle manufacturing from China to the EU countries.
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