Indian Car Giant Tata Group Enters Bangladesh Bike Industry

DHAKA, Bangladesh – Indian conglomerate Tata Group has signed a joint venture agreement last week with the local Nitol-Niloy Group to manufacture bicycles in Bangladesh. Nitol-Niloy Group already intended to start the manufacturing of Tata’s US$ 2,200 ‘Nano’ car, but has since offered to manufacture all sort of components for Tata vehicles in Bangladesh.

O.K. Kaul, executive director of Tata International, told Bangladesh newspaper The Daily Star that a team would visit Bangladesh in May to see how the investment could be implemented. In 2008 Tata still withdrew a US$3 billion offer, the highest Bangladesh has ever received, to invest in a wide range of agro and gas-based industries, engineering and infrastructure.

The Tata proposal, made personally by its chief Ratan Tata in 2003, was considered ‘politically sensitive’ by past governments. The investments in the Bangladesh bike industry come after two other joint ventures in the past months. In January the German Panther International GmbH and Bangladesh based Power Trade Group founded German Bangla Bicycles Ltd. aiming at the production of bicycles.

At that time Michael Schminke, Chairman of the Panther Group told Bike Europe: “in Bangladesh we have a capacity to manufacture 150,000 bicycles annually but are expanding it further.”

In February this year Bike Europe reported on the start of the bike production in the new 75,000 sq ft factory of Uniglory Cycle Industries resulting from an investment by the Meghna Group. This facility has an annual production capacity of about 600,000 bikes.

The bike industry in Bangladesh is taking full advantage of Sri Lanka losing its duty free export status for bikes & parts within the GSP+ regulations. In February the European Council decided that from August 15, 2010 bicycles imported from Sri Lanka are subjected to the regular 14% import tax. Bike parts imported from Sri Lanka (mainly tyres) are from that date on subjected to the regular 4.7% import tax.