July 06, 2012 (LBO) – India’s Bajaj Auto has cut prices for Sri Lanka between 5 to 14 percent after an excise duty hike in the island slashed sales, which was 17 percent of its total exports, a media report said. India’s Economic Times said Sri Lanka accounted for 5-7 percent of total sales and 17-18 percent of export sales, or 20,000 units a month.
“Post the duty hike, exports to Sri Lanka have virtually been zero with dealers just looking to clear the pending inventory of the products,” the newspaper said.
Prices of three wheelers were cut 10 percent and motorbikes between 5 to 14 percent, the report said.
The newspaper said Rakesh Sharma, president of international operations at Bajaj Auto, confirmed that prices were cut, without elaborating.
Prices of Bajaj’s motorcycles went up by around 29 per cent and 3-wheeler prices increased by around 32 per cent in Sri Lanka after the import duty hike.
Thought Sri Lanka’s rupee fell, the Indian currency has also weakened.
Sri Lanka put in trade controls after loose monetary policy and a steep hike in state credit put pressure on the country’s currency peg.
Analysts had warned that the duty hike which disrupts trade will resul