Advances in Economics and Business Management (AEBM) Print ISSN: 2394-1545; Online ISSN: 2394-1553; Volume 2, Number 3; January-March, 2015 pp. 303-308 © Krishi Sanskriti Publications http://www.krishisanskriti.org/aebm.html
Bicycle Exports from India–An Assessment Neetu Yadav1 and Ram Singh2 1IIT Delhi Kailash Hostel, IIT Delhi
2IIFT Delhi, IIFT Bhawan E-mail: [email protected], [email protected]
Abstract— The research is descriptive research which includes data collecting and fact-finding investigations of different kinds and the purpose of this research is the description of the bicycle export industry as it exists at present which includes the competitiveness for bicycle export in the world, the importing markets for bicycle export from India and the price protection. The sample data is taken from 2009 to 2013 from International Trade Center (ITC). We took the data like: top importers and exporters of bicycle in the world, top importers of Indian bicycles in the world and applied Revealed Comparative Advantages (RCA) and National Protection Coefficient (NPC) methods to find out the competitiveness and price protection. We analyzed the world bicycle industry, the top manufacturers of bicycles and the history of bicycle industry of top exporters. Furthermore, we discussed the Indian bicycle industry: the top manufacturers of bicycles in India, top importers of Indian bicycles, growth rates in last five years and the importing history of top importers of Indian bicycles. We also discussed the challenges faced by Indian bicycle industry and the opportunities. Based on the data and analysis we determined the potential importing markets for Indian bicycles, India’s top competitors, price protection and unit value of the bicycle. The opportunities for Indian bicycle industry to improve its status in exporting includes on technology advancement, technology transfer, research development, automated manufacturing, vendor development, product diversification and extension.
1. INTRODUCTION
A bicycle is defined as a rider-powered vehicle with two wheels in tandem, powered by the rider turning pedals that are connected to the rear wheel by a chain, and having handlebars for steering and a saddle-like seat for the rider. The name of the modern vehicle is said to be heard from 1869. From the late 18th century, numerous predecessors of this machine were found to be known as ‘velocipedes’, from a French name.
Rudimentary two-wheeled vehicles driven by the feet were common in late 17th century. In 1690, a Frenchman developed the celerifere, entailing a wooden beam to which the wheels were attached. The vehicle had no handlebar, the rider sat on a cushion on the beam and drove and handled the machine by propelling his feet against the ground. In 1839, Kirkpatrick added driving levers and pedals to a machine of the Draisine type by Macmillan of Scotland. These innovations enabled the rider to propel the machine with the feet off the ground. The
driving mechanism consisted of short cranks fixed to the rear wheel hub and connected by rods to long levers, which were hinged to the frame close to the head of the machine. The connecting rods were joined to the levers at about one-third of their length from the pedals. The machine was propelled by a downward and forward thrust of the foot. In 1846 an improved model of this machine, designed by a Scotsman, acquired the name Dalzell and was widely used in England. The modifications and improvements of the next 15 years included the ball bearing and the pneumatic tire. These inventions, along with the use of weld-less steel tubing and spring seats, brought the ordinary bicycle to its highest point of development. The excessive vibration and instability of the high-wheel bicycle, however, caused inventors to turn their attention to reducing the height of the bicycle. About 1880 the so-called safety, or low, machine was developed. The wheels were of nearly equal size, and the pedals, attached to a sprocket through gears and a chain, drove the rear wheel.
Cycling is potentially an important mode of sustainable transport: it is non-polluting, inexpensive, and good for users' health and the quality of urban life. But the amount of cycling in most cities worldwide remains well below its potential.
In the 1960s and'70s, as air pollution from automobile exhaust caused great concern, and the energy crisis worsened, the popularity of the bicycle increased tremendously. Some areas set up bike lanes and special bike paths. An emphasis on physical fitness in the 1970s and '80s added to this popularity, and an estimated 82 million bicycles were in use in the U.S. in the mid-1980s. Most popular was the lightweight ten-speed touring bike, modeled after European racing models. European nations reached high cycling rates through policies that give priority to cycling, walking, and public transportation over private automobiles. Bikeways that are separated from traffic, stoplights timed to the speed of bikes, shortcuts allowing cyclists to make right-hand turns before intersections, traffic calming in residential neighborhoods, ample bicycle parking, and coordination with public transport have all made cycling safe, fast, and convenient in strong biking cities.
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ONCLUSION
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MMENDATIO
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307
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has immense ike: Uganda,
Neetu Yadav and Ram Singh
Advances in Economics and Business Management (AEBM) Print ISSN: 2394-1545; Online ISSN: 2394-1553; Volume 2, Number 3; January-March, 2015
308
Burkina Faso, Malawi, and Kenya, Germany and Nepal. Although the Revealed Comparative Advantage (RCA) is less than unity for Indian bicycle industry in last five years, still India has enormous scope for bicycle export. As the National Protection Coefficient comes out to be very high for African countries, we can say that the potential importers of Indian bicycles are the African countries.
Punjab supplies 90% of India’s exports in bicycle and its parts. Indian bicycles are out-priced 20-30% by Chinese equivalents. Bicycle exporters in Punjab are making money only from the 16.7% in export incentives (of which 11.7% is in the form of Duty Drawback). Margin of 10-12% after incentives of about 17%. Clearly, the state government can boost this product’s export potential (as India supplies just 1% of world’s imports) by offering additional FMS and FPS-related enticements and additional relief on imports of production material with some export obligation and value-add floor through state-customized schemes.
In 2012, Europe has executed an anti-dumping duty on China-made bicycles and hence Indian manufacturers are moving towards the continent with finest offerings. Indian bicycle exports have the prospective to grow into a $5-billion business from the present $200 million. India used to export to European countries about 10-15 years ago and used to get large orders from countries such as Holland. Once Chinese entered the market with stylish and cost-effective cycles, Indian companies lost the market. But now again we match them in terms of pricing and quality. This is good time for Indian bicycle industry to enter European market.
Indian bicycle industry needs to focus on technology transfer and technology advancement. Even after being the 2nd largest manufacturer of the world, India isn’t in the top exporters of bicycles in the world. Indian bicycles should meet the high quality requirements by advancing in technology and transferring technology from one field to another. There is a lot of scope in research and development for Indian bicycle market. The Indian manufacturers should work on research and development of bicycles.
Another field where Indian bicycles lack behind is manufacturing process. In other big exporting countries manufacturing of bicycles is done mechanically while Indian manufacturers still do it manually. Hence, automated manufacturing is strongly recommended for Indian manufacturers. Moreover, vendor development is also needed in the industry. There are not variety in bicycles produced by Indian manufacturers, there should be diversification and extension of bicycles which will lead India to improve its ranking in the exporting countries of bicycles list.
As discussed in the paper, China is the biggest exporter of the world whereas United States of America is the biggest importer of bicycles in the world. Global bicycle industry has
been growing up for last decade and is predicted to grow in the coming decade as well. For last 5 years, Indian bicycle market is stable and there is no significant progress in the market. Currently, the top importers of Indian bicycles are African countries, Nepal, Bangladesh and United Kingdom. The Revealed Comparative Advantage of Indian bicycle came out to be around 0.3 for last 5 years. The main competitors of India in bicycle industry are China, Taipei Chinese, Netherlands, Germany, and Cambodia etc.
As we observe from table 1 the National Protection Coefficients are very high for Uganda, Burkina Faso, Malawi, Kenya and Germany, there are a lot of opportunities for Indian bicycle industry to export bicycles to these African countries.
Though in recent past Indian bicycle industry is almost stable but the outlook for the future in bicycles is progressive. Since the bicycle industry is a seasonal business and can be obstructed by unusual weather. This industry relies on unrestricted expenditure and hence largely effected by economic conditions. The added advantages of bicycles (including environmental friendly, healthy and congestion free) can play an important role in developing importing markets for Indian bicycle industry. Indian bicycle industry has immense number of opportunities if it works on technology advancement, technology transfer, research development, automated manufacturing, vendor development, product diversification and product extension.
REFERENCES
[1] International Trade Centre (ITC).
[2] List of bicycle types, Bicycle: Wikipedia-the free encyclopedia.
[3] Domestic bicycle industry pedaling along on spec: http://www.crisil.com/Ratings/Commentary/CommentaryDocs/cycle-ind0103.pdf
[4] India’s Export Opportunity in Africa: Issues and Challenges in Select Sectors by Rakesh Mohan, Joshi Biswajit Nag and Ashish Gupta.
[5] Pedaling towards greener India: All India Cycle Manufacturers’ Association (AICMA)
[6] Source of some values: Commerce Ministry.
[7] https//www.bicycleindia.com
[8] Standard Charted