Duty "bound"

Hi Guys! It's afternoon and unfortunately for you, I am free again today. So let me bore you with a long winded post again. This time let's take a look at the high import duties on bikes and why i think they are important.

I agree that globalisation is the order of the day. It is seen as the phenomenon which will rid us consumers of the inefficiencient producers/ service providers while it will also open new vistas for our competetive firms to explore overseas markets and hence grow bigger.

I also agree that we, the consumers, should be given the right to buy a bike we want to at a price that is not inflated just because the bike is manufactured in another country. I mean, why should we have to pay for the fact that our companies, after continued protection from the government for over 50 years, haven't been able develop cabalities good enough to complete with the big companies of the world?

But I do not believe that the people who are responsible for making these decisions are fools. Infact, if we make the mistake of dismissing them as idiots or lazy, because they are the ones responsible for all the obstructions we face in buying our dream bikes, then I believe that we are taking a very myopic view of a subject that is perhaps the most important one facing the country today. Moreover, we must also remember that the so called babus are the very same people who have been selected after a qualifying procedure that is widely accepted as the toughest in this world. India has a whole ministry dedicated to foreign trade and commerce. It has established instutes that research this aspect all the year round and help device India's strategy for the negotiations that take place from time to time. Surely they are not all fools and there must be an angle to this whole situation that we are missing. So let's look at this issue from a perspective that is a bit larger than being merely related to bikes.

At Trade negotiations, India and other developing countries are repeatedly pressurised by EU and US to reduce our duties and make our markets open to their exporters. They say that this would ultimately help us since it would mean that we would get better quality products and would also force our manufacturers to improve out of compulsion.

Now, of course India has way higher duties than say US or EU, but we must remember that duties are not the only side to the coin that is foreign trade. The other side is the oft forgotten issue of subsidy. Unfortunately, India is not as rich as the US yet and while it does have higher duties, it cannot bring them down because it cannont match the amount of subsidies that US gives to it's own manufacturers.

Now the prime bone of contention to this whole subsidy issue is agricultural subsidies in the US. According to USDA (United states department of agriculture) USDA subsidies for farms in United States totaled $177589000000 for the 1995-2006(boy it takes you a while to figure out how much that is in words!). Now I hope you realise that India is primarily still an agricuture based economy( much as we would want it to turn into a biking based economy, those days are still quite some distance away). Should India reduce it's duties to the levels demanded by the developed countries, the market would be flooded with US agri products that, due to the huge subsidies, would be priced at half(or even less) than what Indian produce would be priced at. The Indian governement would not have the coffers deep enough to match these subsidies and hence Indian products will continue to suffer a price disadvantage. When this happens, us consumers with our now affordable superbikes will obviously buy the cheaper and higher quality US import flour, bread, fruits, etc. This will send a wave of starvation across the farmers and on the people whose livelihood depend on agricuture. Such people are very very much higher in number as compared to people who are pro-globalisation and pro-sportbikes,cars,etc. Due to our country's one-man-one-vote system, this also means they have more votes than us. They are also more prone to start a large scale bloody revolution(a la Russia in the early last century) across the country in case they feel that their children just might die of starvation because people in the cities wanted cheaper designer clothes, exotic vegetables and vehicles that could go 0-100 in about the same time it takes for them to shout "murdabad".

So, you see our clever little babus have developed a strategy to stonewall all these cries of duty reduction. They say to the developed world, "yes, we agree that globalisation is a necessity, so why don't you start by removing subsidies in you own countries and allowing mod4 to our IT companies(those in IT would understand this) and then we will reciprocate in a similar manner." I mean, if US is so pro-globalisation and free market, then why does it raise such a hue and cry against outsourcing? The only reason it lets Japanese and Chinese companies operate freely in US is because these are huge markets for US companies too and they know that if they create trade burdens for these companies, the governments of the countries that these comapanies belong to would respond in a similar manner.

Let's take two hypothetical countries, Jap and Ind. Now suppose Ind has a lot of fertile lands and can grow a lot of agricultural commodities but is technically backward while Jap has no or very little fertile lands but it does have great engineers who make great bikes. As a result, when isolated, the prices of bikes in Ind will be high while food will be in short supply in Jap while it will still have great bikes. Now as per globalisation, if these countries were to engage in trade and remove all duties, the people in Ind wil get access to those great bikes while the people in Jap will get to eat. However, i hope you see that how the scenario is not quite so simple in real life when things such as subsidies come into play.

By the way, US and other developed nations also have another weapon in their hands in order to stop third world countries' products from entering their market. It's what is known as "safety standards". Safety standards are made so stringent that adhering to them makes the cost price for the seller go high and hence the product becomes incompetetive.

So, I hope you see how this works, we stop their banks, automobile companies, designers and retailers from accessing our markets so as to use it as a bargaining chip in order to force the developed countries to provide a level playing field to our agri products and IT cos.

Well that ends my lecture. Since this frum is titled "Hard Torque" which, I take it, is word play for Hard Talk, in my opinion this is a suitable place for a bit of dispassionate talk where we put aside our own beliefs, convictions and passions and look at topics of importance from a perspective that does not just serve our own selfish purposes, but also seeks to address bigger issues that are associated and entangled with such topics( as things usually are in real life). We owe our country and it's people at least that much( no matter how bad the roads...he he)

On that note,I hope the developed countries remove their subsidies soon and that India removes it's duties to reciiprocate and then I am really sure that you guys will see yours truly on an affordable superbike riding with a clear conscience, a smile and a twinlke in the eye...

Nice article there.

Brilliantly written! You know your business.

As I said you know your business. You have penned it down perfectly. With clarity and lucidity. I don't know what you do, but you should visit and write more often here. Your ideas of economics are pretty clear!

My opinion is not a reply to any of above posts.....

Well, Japanese concept of looking at product is different, they think about sustainability of product over longer periods of time. This translates to less exploitation of mother earth of her resources. Some household goods japanese purchase lasts as long as 30-40 years. This is a very nice concept compared to US, where 3 year old accident met car is simply crushed into a cubic piece of metal for smelting, this way more cars get sold, car companies benefit, more oil is burnt to melt these junk metal to get fresh steel, more energy spent, i.e. more resources are drawn from mother earth to just satisfy business of car companies. This is mindless.

Take for instance 15 year M800/CD100, Japs make available spares for these old models so that the product life extends and hence avoid strain on mother earth's resources.

In far east market, there is Honda Tiger (a 200cc, minted in different forms like tourer/cruiser/commuter/sports/economy etc etc) with same engine, the model is existing since 1995 and still a popular model. The benefits of longer shelf life is enormous, first sustainability, money saved by not investing in new products, spares cheaper, manufacturing cost lower per bike, cost per bike lower, higher customer satisfaction due to streamlined proven manufacturing, lower complaints, trouble free usage, better reliability etc etc etc.

I would like similar thing to happen in India, and I think the typical Indian 'what next' attitude is due to sheer ignorance, more easy earned cash in his wallet, no concern for mother earth, just greed to move faster and show off nothing else !! Where is the infra for bigger bikes in our country, even if infra is developed it is at the cost of poor people of this nation who still kill themselves if rain fails.

Thanks Ken!
Well it's really hard to describe what i really do, I am a mechanical engineer who has an MBA in marketing from a college renowned for it's expertise on Foreign Trade and who is now working (more like chained to a desk) in a bank and trying to grapple with the intricacies of the financial world. So, you see I know a little about almost everything and yet know very little about any one thing! More importantly, I am also a biker who knows very little technically about bikes but nevertheless wants to go for long rides. Ever so often i try to jerk myself and try to go for long rides, but that chain pulls me back to my desk!
So, as a substitute, I visit this community almost everyday, read about the various trips taken by the members and try to derive a little vicarious pleasure from the exploits of others. Sometimes I come across a topic that really kicks the lethargic writer in me and then, I am afraid I yield to verbosity.
Anyway, since I have been visiting this site for about a year now, I have read a lot of your threads and always find them to be extremely informative and inspiring. And I absolutely love your trip logs.
I promise that from time to time you will find a few of my posts strewn about this community.
Thanks!

I am from a small developed country where the whole of agriculture actually survives on only subsidies. Now the thing is that there's plenty of these farmers, no matter how you twist or turn it. If the subsidies were to be dropped, a lot of them would go bankrupt in a matter of months or a few years at the most. The other side is that they might be able to reorganize and come up with a business model that works without support. Unfortunately (or depending on your view fortunately), they are, just like in India, a large enough population that they can vote for the ones that uphold this system.

The simple fact is that our countries since exist in a deadlock situation that cannot be broken unless significant numbers of people and business change their ways. A gradual removal of measures such as subsidies and duties might be a way out. But it takes only one party to go ahead and upset the entire deal. It's not like it has not happened before, it's why we've arrived at the point where we are today.

Protectionism is the prime reason for any subsidies or duties, because countries do not wish to be at the mercy of any other country without having mutually assured destruction as a safe guard. We all know about human nature, even though most are good, it doesn't take too many to spoil a party.

So I think we're going to be stuck with situation for a long time to come. Indian manufacturers are not going to build high end bikes, since there's no market. And the duties will stay, since it is a bargaining chip in a much larger game. (I'm talking bikes here, but you can substitute any other product you like.)

@hash101: I think you're pretty much hitting it spot on. Perhaps a little over simplified. The same issues that cause Indian politics to be dominated by the farmer vote bank very much exist in other countries as well. In the end every one is trying to safe their own skin.

Yeah, well...had to keep it simple in order to avoid boring people to death! and even the "over-simplified" version is quite morose.
Anyway, I will have to disagree on the bit where you say that duties will stay for a long time to come. I do not believe that the status quo will continue for too long. The international community is quite serious about the trade restrictions in place and even India has, of late developed a lot of clout at the global stage. In fact as per the various rounds and negotiations, we can be quite optimistic about duties being reduced in some years. India and other developing countries are at present trying to get the others to agree on a path to globalisation where they will be able to keep duties on some items that are considered necessary for the economy while allowing imports for ather products. Since the sustenance of our farmers does not depend on vehicles of the two-wheeled variety, I am quite optimisitc that the government would reduce duties at an appropriate time.
Besides, the kind of bike manufacturers that we are discussing here do not pose a danger to our local manufacturers. I doubt they will be able to completely obliterate the Indian companies in the low price segment. However, if the chinese are allowed to enter the market unrestricted, then I am sure the Bajajs and TVSs would have a tough battle on their hands!
Anyways, this is just my opinion, and I am absolutely certain that there are a lot of people out there that hold opinions contrary to mine and I love that because that provides opportunities for debate and exchange of views and information. It's just that I have noticed that optimisitic people tend to smile more often!

I hope I'm wrong of course. I'd love to see bigger, better motorcycles appearing here. So lets see and hope they do something.

i agree on hunger for power, performance and style on bigger bikes in india, but where are the roads! I too belong to Delhi and i had same thoughts as you do, but rest of india i see no potential on HAL road in bangalore i cannot take my bike beyond 52! reason potholes and SPEED BREAKERS! we have water logged roads, no care for quality and low end engineering knowledge, how many ppl can repair bike on a tour if it goes bad!

I still believe its easy to complain abt manufacturers etc etc but do you think somebody would invest money uselessly for 350cc+ bike! we need infra for that first and for that ppl like us need to take concrete steps with media to point out the faults! and remember in india biking for fun has just taken off, its mostly for commuting, why do you think bajaj has gone to back 100cc DTSi discover?

There are ppl on xbhp like hemank who are trying to make a difference by building something in electric tech for bikes and much more.

I would like articles posted when we make a difference and stop complaining.

Disclaimer: this post meant no offence

I crossed 700kms, three states in 7 hours. What better infrastructure do you want? Tell me one Indian bike on which you can do this please!

Do you think that the manufacturers really care if there is infrastructure or not! Read the posts by Hash.

The Hard Torque articles are meant for a larger public.

while putting up an arguement, i have found that it is extremely easy to employ smoke screens in the form of general statements. I mean no offence, but general rhetorical statements like "where are the roads?" would have no effect on me.

anyone who says so has not seen India or is simply exagerating the facts just to put up an arguement. Let me put up a challenge. Name any Tier 1, Tier 2 or Tier 3 city and I would, sitting on my chair in the office,tell you a road within an hour or less of that city where you could drive a superbike.

Moreover, if there's one thing i dislike more than hyperbolic rhetorics, it is the attitude of some people who live in Delhi or Mumbai or other cities of similar scale. This is a recent phenomenon and I find this absolutely irritating. It is quite common to find people from US or other developed countries thinking that India is a land of snakecharmers and elephants with the Great Indian Rope Trick being the pinnacle of indian achievement. We talk about such people and ridicule them and their frailties like needing evian and air conditioning, etc. However, of late I have discovered an almost similar attitude among some people from the aforesaid cities. Let me clarify that "some" is the operative word here and I refer to a very small number of people and I am in no way saying that everyone is like this. These people seem to think that Delhi/Mumbai is the only place worth living as if the rest of India were a jungle crawling with robbers, devoid of basic aminities like roads, electricity and water.

Although the rest of India does lag behind, it really is not so bad. We do have roads on which we can drive. If you decide to move out of delhi someday and travel to Jaipur, Kanpur, Chandigarh,etc. I think you will be pleasantly surprised to find some black strips on the landscape, made of some kind of hard material stretching for miles. If your curiosities were aroused enough and you decide to disembark from your bike/car and investigate these strange things further, you will find that these are in fact roads of a nature similar to those in Delhi. It appears that people in those parts of India too surprisingly have access to the very same material that are used to make roads in Delhi.

And about "taking concrete steps with media to point out the faults", I mean am i not doing exactly that, even as I am typing this? This is also a form of media, albeit an elctronic one but nevertheless accessible to anyone who wants to read it. Granted that I am not airing it over the idiot box or publishing it in print for public consumption but if I were, I would not be alone. There are people out there who are airing these concerns and such articles are ubiquitous in each day's newspaper. News channels cover these infrastructural failings and it is due to this that we are getting progressively better roads.

Anyway, the point is, that if it became a law that you were only allowed to comment once you have proved yourself to be an expert on the subject, not only will it kill the favourite pass time of India but would also end free speech as we know it. Because what this would entail is that you would not be able to criticise our politicians, because as you said that you "would like articles posted when we make a difference and stop complaining."
I guess that this would mean that when Sachin bats, only perhaps Gavaskar, Lara (add your own favourites here) would be able to comment or criticise because everyone else just would not be qualified enough!

Anyway, I have found that such tones and attitudes are usually taken by defeatists and cynics who only persue one thing in life- a reason to be cynical.

PS @ Mindgrinder: although I have quoted your text, it was merely to build a reference for the counter-arguements and not addressed to you personally. In no way do I intend to say that you are one of the people that I have criticised here. I am sure you are a well read, well travelled person who loves all of India and not just any one city

I agree with you wholeheartedly. The fact that the Mercedes and the BMWs of the world can easily handle the so called "bad roads" should be proof enough!

You write very well indeed. And to top it, you got pretty good humour as well, both caustic and "real"!

@ hash

I am not saying all roads are bad, or being in Delhi i haven't visited other states! you talk abt cities and towns go to NAVADA in Noida or Khurja in Western UP, and try proving your point, if you read my first point i said in india biking is more for commuting and not for fun, fun biking is still niche, if you talk abt electronic media and then yes i have made differences at my place and i am even trying that now! i am just another IT guy but yes i have written things to govt, to newspapers etc and things have changed, honestly speaking i haven't even met 10% ppl in bangalore on road and connect them as xbhpians, may be i know them through board thats different.

@Ken
if you mean to say 700 kms in 7 hrs through 3 cities its different than through 3 highways, also you maintained a speed of 100km/hr on an average! with a variance off course. if you talk abt indian bikes! ppl do tour on enfields and other bikes and yes they an maintain a speed of 100km/hr, but if only this could be realistic!

@hash
if you talk about 1 motorable road in anyone city, its like a needle in hay stack, you cannot satisfy hunger of CC with one motorable road! most ppl buy bigger bikes for style or get there own bikes modded, i bought and FZ against pulsar 150 to break away from the habit, and shift to a leaner and a machine with better refinement!

its easy to come up on a forum write an article and giving high hopes without looking at real scenario or understanding basic customer mindset! one of the things i pointed out bajaj moving to 100cc discover DTSi any idea why! cuz bigger bikes have less market, do not count FZ success as big, its still not close to what pulsar 150 made as a success simply on price point ratio! as far as hyperbolic rhetorics are considered i am not taking it personally, but yes we are the ppl who commute daily inside the city and face all the odds. riding on high speeds is more of a skill game. All i meant was being practical, it was not totally an argument i agreed with some of your point, but yes when i am consumer i have the right to make a decision and believe me if you were right Aquila won't have suffered the result it did, neither did BMW bike launched in India. Bigger bikes are going to come but with time, we need to be patient and wait for the business ppl to make right decision good for them in first place, its too far from what we dream to be soon.

Fortunately, the two places you named are familiar to me. Correct me if I am wrong but I think the Khurja that you speak of is close to meerut right? If so, then I guess you can reach the delhi meerut highway within an hour which I think is pretty ok ( have they completed that flyover just before meerut there? while I was there about 4 years back it was still being built for about 5 years!). Anyway, I don't know exactly where Navada is in Noida but I guess if it is in Noida then you can get to the toll road pretty quick. Plus there's also the Noida-Greater Noida stretch and the expressway to Mathura. Well I had promised to name one road since you had said that none existed. If you now say that 1 is not enough then I guess I would'nt be able to satisfy you.

There's just one observation I want to make here, even in countries where you have the kind of infrastructure that you describe here, there are severe speed restrictions in place and even there I guess there are very few roads where you could drive an sbk to your heart's content. I would request ken to give his thoughts on this since he would know much more about this. About understanding customer mindsets and the markets for big bikes, why aquila was unsuccessful and about being practical, I would suggest you read my first post on this thread where I have talked about exactly these issues.


Anyway, I think our exchanges should stop now as we are increasingly just addressing each other and trying to prove that our opinions are right which I think is defeating the purpose of this thread. everyone's got a right to hold his own opinion. Let's just agree to disagree. I see that you agree with some parts of what I wrote while I agree with a part of what you have written and if we continue just countering each other, pretty soon we would end up being repetitive and driving others from this thread. I suggest we should take this over pm if you want to discuss this further. What we need is a fresh perspective from a new person rather than the same old people saying the same old things. I liked the jousts we had but for the sake of other xbhpians, I propose that we stop. Let's not take ourselves too seriously.

@ ken: Thanks a lot. hey how about a new article on Hard Torque by you? it sure has been some time when i last saw something by you here. Let's hear your thoughts on some other new contentious issue.