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Electric bicycle industry feels left out of PLI and FAME II schemes

Electric bicycle industry feels left out of PLI and FAME II schemes
With the electric bicycle industry left out from the benefits of the ambitious PLI and FAME II schemes, India risks losing exports worth Rs 10,000 crore.

Industry

Electric bicycle industry feels left out of PLI and FAME II schemes

With the electric bicycle industry left out from the benefits of the ambitious PLI and FAME II schemes, India risks losing exports worth Rs 10,000 crore to the European market over the next five years.

Pankaj M Munjal, Chairman and Managing Director, HMC Group, says the EU levies a heavy anti-dumping tariff on e-bike imports from China that may go as high as 83%. He highlighted that the bloc has initiated resultant re-shoring of e-bike production.




In 2019, the estimated re-shored e-bike production was 930,000 units with countries like Portugal, Poland, France, Bulgaria, Italy and Romania grabbing more than 80% of it. In 2020, the EU imported almost five million bicycles, worth €930 million, from countries outside the bloc.

“With quality products at a competitive price, Indian manufacturers are poised to grab this opportunity to secure the migrating business out of China and the encouraging response to our first batch of e-cycles delivered in June is a testament to it,” said Munjal. “However, we are losing out on the policy side that would have helped the industry to take advantage of the shrinking share of China and far-East as the suppliers of e-bikes to the EU, e-bicycles are conspicuous in their absence in the FAME II and PLI schemes despite several representations to the ministries concerned even as every electric vehicle, including e-scooters, e-motorcycles, e-cars and e-buses enjoying incentives under these schemes.”

The industry fears that the specific exclusion has a masse migrated the manufacturing value of about Rs 1,000 crore going up to Rs 3,000 crore in FY24 to the re-shored capability of the EU. Munjal pointed out that in the next five years, India would lose a visible pipeline of Rs 10,000 crore worth of export orders of e-bicycles if the re-shored capability of the EU manages to secure the migrating business out of China instead of India.


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It should be noted that Hero Cycles started manufacturing electric bicycles three years ago and following the Make-in-India initiative, it invested more than Rs 300 crore in a new factory to manufacture e-bicycles. The company got a Rs 400 crore boost from its vendor base and another Rs 300 crore in the UK for exporting to international markets to grab the lion’s share of migrating e-bicycle manufacturing from China to EU countries.

Meanwhile, the e-bike market valued at USD 23.89 billion in 2020, is expected to reach USD 47.68 billion by 2026 – growing at a CAGR of 12.27% during the forecast period 2021-26.


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