After telecom, India halts Chinese power equipment suppliers

After telecom, the Indian government is applying the brakes on the import of cheap Chinese power equipment that is hurting domestic manufacturers, since the Chinese government provides high subsidies  to its power equipment suppliers.

Chinese power equipment manufactures have zeroed in on India's planned addition of 60,000 mega-watts of power capacity from 2007 to 2012 and hope to corner 30 per cent of the capacity by supplying equipment to local power companies at 15 per cent lower than what it would cost to source from Indian power manufacturers.

With equipment costs making up for almost 80 per cent of the cost of setting up a power plant, Chinese companies like Dongfang Electric Corporation, Shanghai Electric, Harbin Power Equipment Company Ltd and SEPCO are thriving in India due to the economies of scale, the Chinese government's export subsidies and the undervalued yuan.

Domestic equipment manufacturers like state-owned BHEL and L&T have raised the issue of the advantages Chinese equipment suppliers have over them, with the Indian government.

Associated Chambers of Commerce and Industry of India (Assocham) has been asking the Indian government since June last year, to impose tariff barriers on Chinese power equipment imports.

The Chamber had said that domestic power equipment manufacturers have lost business opportunities to supply power equipment to Indian power producers of 50,000 MW of capacity.