Cycles will now cost more! Thank you Pranab Mukherjee….

Amazing things can be done if you lobby right.

The cycle component manufacturers in Ludhiana are inefficient in their manufacturing capabilities. Add to that we must have kept everything in the ‘small scale sector’ to ‘help’ the poor guys. However these ‘poor’ guys can lobby well even if they cannot make good quality products at cheap prices. So they lobbied hard.

Cycles which these guys cannot (or are not interested in making) make, but the Chinese guys can make have got expensive. A Chinese bicycle which was taxed at an import duty of 10%, will now be taxed at 30%. Not bad, just a 200% backdoor support for these guys.

Solution 1: Read the budget carefully, you are now allowed to import PERSONAL goods FREE of duty up to Rs. 35,000. So if a friend is coming from Sing, KL, Vietnam (Dubai is expensive) ask him/her to tug it along. At 15kg you will not pay too much as freight.

Solution 2: You may be able to buy it ONLINE from the manufacturer (Cannondale, Trek, Giant are you listening?) and ship it to you at Mumbai as long as you declare that it is for personal use (so no duty). Some enterprising sports shop owner will soon do it. Watch this space….:-)

PS: I have shares of Tube Investment which is launching luxury cycles soon. TI will benefit from this change in duty structure.

Note: did you see my change in language? Vested interest creates change in tone :-) LOL LOL….about a 100 times!!

 

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14 Responses to “Cycles will now cost more! Thank you Pranab Mukherjee….”

  1. Subra….interesting to know ALSO about your TOP BYCYCLE Knowledge.I recollect reading in past but liked this post …will watch out this space for Enlightment on Bycycles .Thx

  2. Ah !! Any of your reader’s, who want a Giant (or any) bicycle from Taiwan, i can help (for a fee of course, ha ha ha). I use one here and it’s pretty good for the money (as if needed that quality certificate!).

  3. What is KL ? Kuala Lumpur?

  4. pornob wants to bring in the era of smuggling again.morarji desai single handedly created the haji mastans and dawoods of the world thanks to his idiotic policy on gold imports.all self righteous lefties and JNU types are already asking for further tarrifs on gold.

  5. the same logic applies to those who dont want kirana stores to be affected by competition from foreigners.ditto for car manufacturers.i cant figure out why i should not be able to import a second hand good quality car from britain or australia without paying twice its cost.who are they protecting ? second hand maruti sellers?.vocal minority lobbies with vested interest always capture regulators and power brokers in the govt.this is an iron law of public policy

  6. @pravin
    unlimited +1 to your comment!

  7. Quite a lot of actions happening.None of these are in favor of common man. First came in budget that was more friendly for Rich.
    Person who is already rich became more richer. People in lower tax bracket were ignored. Then came in the reduction in EPF%.
    Here come Cycle effect.

    Just for inofrmation. People who visit, singapore/Thiland, they buy LCD Tv over there, that is lot cheaper even after paying fees at airport.

    Yes your second option of buying online makes sense

  8. Subra sir,
    on a different note just wanted to share some video about current situation in real estate

    http://hindi.moneycontrol.com/tv/view_video.php?autono=53155
    the title in hindi says “real estate in ICU”.

    thanks!

  9. @pravin
    I am not sure but If we allow free flow of second hand cars, then India may become a dumping yard for obsolete foreign cars

  10. you think Indians are fools to buy bad products just because they are pushed by ads? …on second thoughts yes of course!

    they dumped tobacco, they are dumping unhealthy food and colas, we are lapping it up…

    so maybe…

  11. I was handling sales for Bangladesh, Africa and Srilanka.So travelled there extensively. There they allow importing of cars..So the country is filled with reburbished toyotas. There is no industry at home at all. For what ever impact these policies might have on end consumer we also need to take into account the amount of jobs they bring into the country.
    .

  12. @karthik. that is an old mercantilist idea.the reason for trade and an economy is to increase the wealth of people.ie make more stuff and services available to people.artificial political boundaries have no relevance to that end.
    would you rather have people in cycle rickshaws because there is no local car maker or would you let them import stuff they like?
    if you want to “create” jobs ,you could in classic govt babu style have one set of people dig ditches and other set fill them up.
    nobody is “DUMPING” colas or unused cars into india.people who value these things buy them.i may be ok with a decent british used car while someone else might want to drink cola.
    the bad effects of tobacco or colas products is not caused by their import.it is caused because people “abuse” them.

    economic thinking is muddled by people thinking that scarcity is better than abundance when political borders crop up.
    how about maharashtra banning UP made cars?wont UP dump cars into bombay?wont marathi manoos have no car making jobs because UP wallas will take them ? this sort of argument is economically invalid.it belongs to shivsena and the communists -who want to make everyone poor -equally poor

  13. the industry which karthik is speaking of will not emerge in poor countries without a)trained manpower b)necessary capital (eqpt and financial) c)allied infrastructure
    a poor country can either wait for years until savings formation results in enough capital to start the business and wait for an entrepreneur to meet this need more cheaply than importing ,OR do the smart thing: import.

    do you crib that you cant make shoes or clothes by yourself? no you import them ie buy them from strangers.the same logic applies even when political boundaries arise.people trade,political boundaries dont

  14. //Solution 2: You may be able to buy it ONLINE from the manufacturer (Cannondale, Trek, Giant are you listening?) and ship it to you at Mumbai as long as you declare that it is for personal use (so no duty). Some enterprising sports shop owner will soon do it. Watch this spaceā€¦.:-)
    //

    http://www.vpostasia.com/india/vpostusa/usa_intro1.htm

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