Yea, Bicycles are very cheap in India due to the large scale of production. They also have specialized bikes for farmers, which help them carry around multiple bags with ease.
Many, if not most of the young people in India own a Bicycle not for recreation, but as a serious mode of transportation.
I will take a $60 steel Bicycle over a $20 cardboard bicycle anyday.
http://www.fitjog.com/bicycles-for-weight-loss/atlas-bicycle...
At roughly 60USD that is a bike sold on the best SEO'd web site. What is sold out of local garages will be less.
I am not a Indian native and I am not a developmental economist, but I cannot see a cardboard bicycle doing this http://www.flickr.com/photos/pingpongong/7855376404/ or this http://www.flickr.com/photos/aidg/533780375/
The traditional Phillips style bike has a long pedigree - its brakes may be useless and its long in the tooth but everybody in SE Asia can fix one.
When a cardboard bike folds, you throw it away and get a new one.
I think the environment will still have a net win on steel.