FOPSIA strongly oppose decision of Punjab Government to give land to Chinese cycle company

Ludhiana, May 18, 2016: Federation of Punjab Small Industries Associations (FOPSIA) strongly oppose the investment of China in India. In a statement here today, Badish Jindal and Raj Kumar Singla, president and general secretary, respectively, said the industry of India especially the Bicycle Industry is already suffering due to the cheap imports from China. China is much ahead of India in terms of Technology, so small Indian Companies cannot compete with them in any form. We had a set example of Honda and Suzuki as with their arrival in India through collaboration with few Indian Companies. The leading Indian companies such as Bajaj, Vespa, Feat, Ambassador, Yezdi were forced to close down their units and huge profits were earned by these companies and taken away to those countries. Just for example, in the Last year China purchased the 69% Robots of the world. Even after the recession, the Chinese economy is growing at the rate of 13% whereas India is unable to touch even 7% of the growth rate.

They said even the developed economies like European Union have imposed the anti-dumping duty of 48.5% on Chinese bicycles to protect their domestic industries and similarly in the year 2014-15, the Gov. of India enhanced the import duty on bicycles from 20 to 30 % for giving a relief to domestic bicycle industry.

The Punjab Government is ready to give free land to big Chinese companies and a big bicycle group whereas from small industries they are planning to charge Rs. 5000 per Sq Yd for the same land. This move of government is illegal and uncalled for and step motherly treatment for existing and small industry. This seems to be a big scam as Punjab Government who was not even ready to reduce the VAT on bicycle which was just affecting below 50 crores to the State Govt is giving a land of more than 400 crore at zero cost to Chinese and a big company.

If the State Government was so concerned about the industry, then it was supposed to bring the technology at Govt cost from China and transferred it to India.

They said FOPSIA is further doubtful that the bicycle companies those are fighting for a single model, how such companies can share their technologies with smaller bicycle manufacturers. This move seems to be a step to create monopoly in bicycles by a company to churn out small bicycle manufacturers from this trade.

The VAT retentions of 80%, the power difference of approx. 28% (Rs. 4.99/- per unit from New & Rs. 7/- per unit from existing) are the main factors those are going to effect the small existing industry. The existing industry is already struggling due to high rate of taxes, high power prices, high labour rates, high Interest rates and poor infrastructure. Further, the rate of procurement by states is dropping down which is a giving a tough time to the local bicycle industry. The imports from China have increased from 200crores to 2000crores in last 10 years and Export is continuously decreasing

The 258 acres of land in Dhanansu is Shamlaat Land and the Gov. was supposed to provide the same to the existing industry on very cheap prices. This was the only Focal Point crafted after gap of 20 years and the industry of Mix Land Use area was expecting some relief by getting a chunk of land there. The same episode happened in the year 1996 when 200 acres of land in Focal Point was allocated to the few big houses.

“With the intrusion of Chinese companies, it would be difficult for the Indian companies to survive and there will be no other option to close their units as the History states that even Birlas and Bajaj were forced to close their companies”, they said.

Further, they said,” We strongly oppose this move and we are approaching the political parties for supporting the existing small industries against this move. FOPSIA is also planning to file a PIL in case the government implemented the decision to give land to any big house or Chinese companies at cheaper rates or free of cost.”