India plans 20pct plus import duty of on equipment for power plants.

Economic Times reported that BHEL and L&T who have developed over 30,000 MW capacities to produce boilers and turbines are in for good times ahead as the government prepares to impose duties of around 21% on imported power equipment.

As per report, the matter will be given a formal nod in another two weeks time.

A senior government official told ET that the move has been taken in view of the capacity build up by the domestic equipment manufacturers who have been lobbying for some protection against imported equipment from China and Korea that come with special advantages of a soft loan.

The senior government official said that "Most of the current generation capacities including the mega and ultra mega power plants have already placed orders and this duty will not be applicable on them.”

The protective duty, may give the domestic equipment suppliers a double benefit if the rupee continues to remain depreciated at the current levels. Analysts, however, believe that the rupee would stabilize by the time the duty comes to play for prospective projects.

It is estimated that foreign equipment makers account for almost 30% of the total power equipment market in India. The leading foreign equipment makers who have eaten into the domestic market are those from China, Korea and Japan. Chinese equipment makers have bagged large projects like that of Reliance Power, while the TATAs builders of another power mega power plant have opted for Korean power equipment maker over domestic companies. In most of these cases, these countries have offered soft loans to buy the equipment that come as an added incentive to the power companies.

Source : steelguru.com