Even as the import of Chinese cycle parts to Ludhiana reached Rs 1,800 crore last year from Rs 300 crore six years ago, Ludhiana-based industry is still doubtful about the Chinese companies after the continuous fraud and losses suffered by the Indian companies.
There have been losses of around Rs 131 crore since 2009 to the Indian industry which imported goods from China. The Engineering Export Promotion Council (EEPC) has issued several advisories to the industrialists regarding the threat being posed by the Chinese companies.
Most of the cycle companies in Ludhiana import cycle parts from China at cheap rates. Chinese companies that take money in advance duped at least 50 cycle companies in Ludhiana last year. Several incidents go unreported and are never brought to light.
The EEPC had issued a trade advisory regarding the threat Indian companies faced from their Chinese counterparts. Indian companies are targeted mostly online asking them to pay online for different goods. After the payment the communication from Chinese side stops.
The advisory states that other modus operandi of the Chinese companies is to invite Indian companies to China along with cash and gifts for the senior executives and other local officials, citing Chinese culture. After the Indian company is back to India, the Chinese company goes silent, thus the loss of the cost on transportation and accommodation among others.
Charanjit Singh Vishwakarma, who is the president of United Cycle Parts Manufacturers Association (UCPMA), said the cycle industry had suffered losses in crores due to the fraud by Chinese companies. "Complaints are received every other day where the number of goods is much lesser than ordered by the cycle companies," said Vishwakarma.
He said the Centre had remained inefficient in taking action against the fraud committed by the Chinese companies.
Cycle companies have been the target of Chinese companies as cycle parts are among the most imported goods from China due to cheap rates there.
"The import of cycle parts from China in 2008 was Rs 300 crore whereas the export was Rs 1,700 crore. However, now the imports have reached Rs 1,800 crore and exports have come down to Rs 1,200 crore," said Vishwakarma.
Upinder Singh, regional director of EEPC based in Jalandhar, said the cases of fraud by Chinese companies with Indian companies were very high a few years back. "Due to the continuous advisories, the industrialists have been sensitised and the rate of fraud has come down considerably," said Singh.
Chemical industry has also suffered losses, though not to the extent of the cycle industry, due to fraud by Chinese companies. Ashok Makkar, president of the Ludhiana Dyeing Association, said there were instances that low quality chemicals were supplied by the Chinese companies.