Demand to halt imports of power, telecom gear from China

The association of electrical and electronic goods manufacturers, the Indian Electrical & Electronic Manufacturers' Association (IEEMA) has demanded checks on rising imports of equipment related to power generation and telecom from China.

IEEMA has demanded that the government should consider banning imports of equipment related to power generation and telecom from China.

Director-General of IEEMA Sunil Misra pointed out that increasing imports of Chinese electrical equipment has become detrimental to the interests of the country and the government should actively consider banning imports of Chinese equipment in the power and telecom sectors.

Misra has warned that overdependence on China for equipment could lead to a "dangerous" situation as their servicing and spare parts are unlikely to be available in case of a conflict or economic standoff.

Heavy industries minister Praful Patel said recently in Parliament that cheaper Chinese imports in the heavy industries segment, including electrical equipment, have led to under-utilisation of the domestic capacity in the capital goods sector.

India's imports of electrical equipment from China increased by 61.53 per cent between 2009-10 and 2012-13, twice as much as the rate of growth of such imports from the rest of the world, as per information received from the Engineering Exports Promotion Council of India (EEPC).

The IEEMA and the Institute of Electrical and Electronics Engineers (IEEE) today announced the signing of a memorandum of understanding (MoU) to promote collaboration on various initiatives.

The MoU will enhance sharing of knowledge and global experiences in key areas of electrical and electronics sectors in addition to strengthening competencies and skill development of organisations, working professionals and students, IEEMA said.

Besides, the industry association said, it would facilitate collaborative efforts among various stakeholders on emerging technologies, including joint programmes, for the benefit of engineering community.

Meanwhile, India's Rs1,30,000 crore electrical equipment industry saw domestic demand grow 9.8 per cent in the second quarter of the current financial year, with a 6 per cent growth in fiscal first half.

Production recorded a 9.8 per cent growth in the Second quarter (July-September 2013-14) and a 6 per cent growth in H1, after a weak 2 per cent growth in Q1.

Growth in Q2 has been due to a rise in domestic demand, after negative growth in domestic orders in Q1 and the preceding quarters.

Delays in project execution and non-adherence of payments still a concern for manufacturers.

Some progress in power transmission and sub-station projects, power generating stations, especially renewable energy like wind, R-APDRP projects and orders from select core sectors like construction and real estate have helped in the moderate growth, although the electrical equipment industry continues to face very severe credit availability, enormous delays in project execution and non-adherence of payment terms by customers, mainly power utilities, resulting in unmanageable cash flow problems across the industry.

The rupee depreciation has made critical imported raw material and inputs for electric equipment more costly, but given the continued threat from imports of electrical equipment in the Indian market, domestic manufacturers are being forced to absorb this additional cost to remain competitive.

''The Indian electrical equipment industry has shown some revival in the first half of the current fiscal, after a negative growth of 7.8 per cent in production in 2012-13. Domestic demand, coupled with increase in exports, has managed to keep the industry afloat. The industry needs to build a robust export portfolio so that it can optimally utilise its built-up capacity, which is currently underutilised across all sub-sectors'', said Raj Eswaran, president of IEEMA.

The transformer industry, both power and distribution transformers, has seen a turnaround in growth from (-)4.5 per cent in Q1 to a growth of 18.76 per cent reported in Q2 of this fiscal.

Power cable, capacitors, energy meters, transmission line towers, high-voltage switchgear have also improved their performance in Q2.

However, segments like conductors, low-voltage switchgear and rotating machines have further declined in Q2 FY'13-14.

Although, overall imports of electrical equipment have shown a negative growth, imports of power transformers, insulators, cables (mainly through power project import route) and AC motors & generators have continued to increase.

In 2012-13, imports had captured 38.26 per cent of the market for electrical equipment in India, whereas there was significant underutilisation of installed domestic capacity, according to IEEMA.