The bicycle industry is among the key businesses that looked forward to a boost due to the coronavirus pandemic. The countrywide lockdown imposed by the government to curb the spread of the deadly COVID-19 disease initially triggered added demand for bicycles, which are one of the most efficient ways to move around while maintaining social distance. However, the clash with Chinese forces in Ladakh in which 20 Indian soldiers lost their lives has increased concerns for Punjab, a bicycle-manufacturing hub which relies on China for parts.
If India’s bicycle-part imports dry up, it could mean a huge setback for the Rs 7,000-crore industry, unless the government steps in.
Being the safest mode of travel in the current situation which warrants social distancing, the humble bicycle suddenly saw a spike in demand when the government began to unlock an economy already slowing down even before the coronavirus outbreak.
The rising popularity of bicycles had market leader Hero Cycles eyeing a jump in its market share to 50 or even 60 per cent from 40 per cent.
“Those who are not going gym are opting for cycling. The demand has increased. Earlier, we manufactured 18,000 cycles per day, and this has now increased to 20,000 cycles per day,” said Pankaj Munjal, chairman and managing director, Hero Cycles.
However, the India-China border tensions have affected that optimism. In the bicycle-making hub of Ludhiana, 70-76 per cent of the parts used come from China.
Local micro, small and medium enterprises (MSMEs), which also manufacture the components, are still recovering from the COVID-19-induced lockdown, and in no position to fill the gap that an end of imports from China may leave.
“Our production is just 20 per cent since the industry has been hit due to the lockdown… the labourers were allowed to leave to their native places… The government has not given us any tax rebates,” said Gurmeet Singh Kulhar, president, Federation of Industrial and Commercial Organization.
“Moreover, we had to bear the expenses of our labourers during this period… We had to even pay foxed charges of electricity, property tax and other similar charges,” he added.
Punjab accounts for 92 per cent of the total production of bicycle parts for the country, which makes 18 million bicycles per annum, and 75 per cent of bicycle production.
The industry is clutching at all possible straws.
The share of imports of bicycle and parts from China varied from 70 per cent to 76 per cent in the total in the last five years.