E-bike makers want 30% subsidy; CVD to go

Electronic bike makers want countervailing duty on the import of e-bike components to be rolled back and 30 per cent subsidy on e-bikes under New and Renewable Energy Policy in the upcoming Budget in order to provide impetus to the industry.

"The government should announce (in the forthcoming Budget) some policy support for e-bike industry by withdrawing CVD on the import of spare parts of electronic bike that has hindered the growth of the domestic e-bike industry," Hero Electric CEO Surinder Gill told PTI.

The Centre currently charges 8 per cent CVD on the import of e-bike components. For making e-bikes, firms import motor, battery, and other electronic and mechanical parts from China and Taiwan. Over 55 per cent of components are imported.

Also, in order to encourage the use of environment friendly vehicles, the government should provide at least 30 per cent subsidy on the purchase of bike under the New and Renewable energy policy. "Close to 30 countries are giving such subsidies on e-bikes and Indian government should also seriously think over it," he said.

The industry also wants infrastructure support in the form of charging stations for e-bikes and parking provisions in the proposed residential and commercial buildings.

The industry is confident of selling 6-8 lakh e-bikes in next 3-4 years if the Centre accepts their demands against the present expected size of three lakh e-bikes growing at a pace of 10-15 per cent.

The government while charging 8 per cent CVD on import of e-bike components from manufacturers allows traders to bring in the complete bike without paying any duty.

"It is quite disturbing for the domestic industry that we are charged CVD for importing components while traders could import the bike without paying any duty on the same, which puts trader into advantageous situation as he can sell bikes at Rs 3,000-4000 cheaper than us," he said.

The government should also initiate efforts towards providing infrastructural support which is critical for the growth of the industry in this Budget.

"By infrastructural support means, we want that Centre should set up some Rapid charging stations for e-bike so e-bike owner can easily get his bike charge for running," he said.

Provision could also be made in the buildings wherein preferred parking could be set up for e-bike owner as being followed in US and England.

Centre should also enforce a single rate of VAT on the e-bike to bring uniformity on the tax structure. "Against 12.5 per cent VAT, there should be 4 per cent VAT to be levied across the country on e-bike," said Avon Cycles, senior manager (marketing), U S Dubey.

Companies like Yo bikes, Ultra Motora, Hero Electric, Avon Cycles are major players in e-bike segment which is still at nascent stage.