Electrical gear cos seek dumping duty on Chinese imports.

MUMBAI: Stiff competition from cheap quality Chinese goods is compelling Indian electrical equipment manufacturers to press for imposition of anti-dumping duties.

According to the Indian Electrical and Electronics Manufacturers Association (IEEMA), China has over 90% share in the quantity of imports of such products into India. Concerned with the serious threat from Chinese goods, the electrical industry, which accounts for a larger share of the manufacturing space in India, has sought government intervention for preventive measures such as anti-dumping duties. India imports electrical equipment such as transformers, insulators, AC circuits, motors, electric meters and towers worth Rs 4,000 crore every year.

“We have written to the ministry of heavy industries for necessary action as the local manufacturers are being forced to cut down their capacities due to poor consumption,” PV Krishna, director general of IEEMA told ET. The local equipment manufacturers are losing business opportunities to foreign suppliers, in particular to counterparts from China.

“For the last couple of years the industry has seen under utilisation of capacities across the products, going below 50% in certain cases,” said Mr Krishna. The association’s study shows that the percentage share of China has been increasing year-on-year. For example, China commands over 50% of the share of imports of electrical motors and insulators. Apart from China, Korea, Germany and Brazil are the other major source of imports in this segment, but they have a minimal share.

This development has come after heavy power equipment manufacturers, such as L&T and Bhel, raised concerns over the rising import of power-generating equipment. Indian power producers, mainly private players such as Reliance Power, Adani Power, JSW Energy and many others, have sourced equipment from China worth over Rs 2,50,000 crore. This was largely due to inability of local manufacturers to meet demand.

However, in transmission and distribution segment, local manufacturers have developed enough capacity to meet the rising demand. “Manufacturers are being challenged by the low-cost products available in the market,” says Ramani Kasi, president of Raychem, an electrical-equipment manufacturing arm of RPG group. Chinese equipment are cheaper due to state incentives and undervalued currency. Whereas, India does not have such provisions.

“Locally manufactured equipment attract duties and taxes of about 6% whereas Chinese manufacturers get government incentives,” said Mr Krishna.

India has set a target for adding power-generation capacity of over 1,00,000 megawatt in the 12th five-year plan. In line with adding generation capacity, transmission and distribution networks have to be enhanced in the country. As estimated by Central Electricity Authority, the T&D infrastructure development would entail investments over Rs 6,40,000 crore for 12th plan.

Currently, the inter-regional transmission capacity stands at 20,800 mw and is expected to reach 37,700 mw by 2012. Similarly, activities in the distribution sector are also increasing due to implementation of government-sponsored schemes such as RGGVY and R-APDRP, with objective of providing electricity to all by 2012

Source : Economic Times