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HindustanTimes Mon,24 Nov 2014

Imports of major industries exceed their exports due to cheap options

Arjun Sharma, Hindustan Times  Ludhiana, July 23, 2014
First Published: 13:46 IST(23/7/2014) | Last Updated: 13:56 IST(23/7/2014)

The imports of almost all major industries of the region have exceeded their exports significantly over the past some years because there’s no upgrade of the machinery, while cheaper options from China and other countries are available.

The bicycle industry that once boasted of heavy exports to almost all major countries now faces the heat from cheap Chinese imports.

The Federation of Industrial and Commercial Organisations (FICO) has concluded in a special study of this industry that its import bill of parts in the year 2012-13 was $26.5 crore (Rs 1,593 crore), up from the 2006-07 figure of $13.2 crore (Rs 794 crore).

The export bill in the year 2012-13 was $22.9 crore (Rs 1,377 crore), up from the 2006-07 mark of $13.6 crore (Rs 818 core).

“Because cheap raw material is available in China, most of the bicycle parts are being imported from there,” said FICO president Gurmeet Kular, adding: “These include spokes, chain, and steel ball bearings. At least 50 bicycle part units have closed down in Ludhiana in the past five years only because of failing to compete with China in price.”

The technology gap between India and China is also wide. “China has better infrastructure, more advanced machinery, and productive labour, which keep its input cost down.” said Kular.

Many bicycle parts from China and re-branded in Ludhiana. While this benefits the neighbouring country, the local manufacturers are worst hit.

Exports have not risen in the way the imports have, a trend seen also in other industries such as sports goods, where 60% items are imported from China, Vietnam and Pakistan and re-branded in Jalandhar for the domestic and international markets.

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