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Indian Bicycle Exports May Slow Down

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LUDHIANA, India (May 11) – Terming the new duty drawback rates for bicycle and bicycle parts as a big setback, Engineering Export Promotion Council (EEPC) of India has projected a fall of INR 250 crore (US$ 51.3 million) to INR 300 crore (US$ 61.6 million) in the value of exports in the current financial year […]

LUDHIANA, India (May 11) – Terming the new duty drawback rates for bicycle and bicycle parts as a big setback, Engineering Export Promotion Council (EEPC) of India has projected a fall of INR 250 crore (US$ 51.3 million) to INR 300 crore (US$ 61.6 million) in the value of exports in the current financial year and has written to the government seeking a revision on the rates. According to the Ludhiana Times the government has fixed the duty drawback rates on export of bicycle parts with a cap of 8% of Free on Board (FOB) value. Earlier, it was being given according to the unit or quantity-based rates.

The government has also not changed the rate of duty drawback on the export of bicycles, which was kept at INR 93 (US$ 2.14) in spite of exporters’ demand of raising it to INR 138 (US$ 3.18). The new rates became effective May 5. The revised rates were announced when several exporters were in China to take part in the 15th China International Bicycle & Motor Fair. “Now, exporters are in a state of confusion regarding fixing the rates because of the announcement of new rates of drawback”, Satish Dhanda, Chairman of Bicycle panel, EEPC, told the Ludhiana Times. Dhanda said with the reduction in the rates of duty drawback, bicycle exports would come down by INR 250 (US$ 51.3 million) to INR 300 crore (US$ 61.6 million) from INR 750 crore (US$ 154 million) last year. He said that it would be difficult for exporters to absorb the cost of steel, which had gone up substantially because of increase in excise duty from 12% to 16%. (MH)

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