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Sri Lanka’s City Cycles Targets EU after GSP+ Ruling

Sales & Trends

LUDHIANA, India – Sri Lanka based City Cycle Industries is upbeat after the Court of Justice of the European Union ruled in its favour on a complaint for carrying out transshipment operations. The ruling opens doors for a re-admission to GSP+ making duty free export to the EU possible again.

Sri Lanka’s City Cycles Targets EU after GSP+ Ruling
MD Miflal of City Cycle Industries gearing up for exports to the European Union in order to regain lost ground. Photo Satnam Singh

EU’s Court of Justice ruled that there was not substantial proof for City Cycle Industries alleged transshipment operations with bikes originating in China. The bike maker was barred from exporting to the EU market since 2012, when EU delegation carried out preliminary investigations into its operation in Sri Lanka. The company contested the case since a couple of years.

Exempted from 48.5% anti-dumping duty

With the Court ruling, City Cycle Industries is now exempted from paying 48.5% anti-dumping duty along with Chin Haur of Taiwan.

The Colombo based company is now gearing up for exports to the European Union in order to regain the lost ground. “We used to export about half million bikes to Europe in 2010 under the GSP+ provision but when it was removed the exports to EU dropped to some 250,000 units in 2011-12,” said Miflal, Managing Director, City Cycle Industries at the Bike Expo show in Ludhiana, India which took place earlier this month.

Human rights violations

In August 2010, Sri Lanka lost its GSP+ status due to alleged human rights violations in its fight against the Tamil Tigers demanding an independent homeland. But in 2012, the company came under the EU scanner for transshipment operations. The 30 year old company exporting bikes to Europe from over one decade hopes to make comeback in its main export market. “Currently, we are manufacturing about 200,000 units and around half of the production is shipped to neighbouring India, which is again a big market for us,” said Miflal.

City Cycle intend to commence exports to Europe again this year and targets to ship some 100,000 units. The firm hopes to regain its earlier position on strength of shorter lead time and competitive freight rates compared to other GSP+ Asian bike export countries like Cambodia.

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