A day after the Prime Minister held a meeting to push manufacturing in the country, the electricals industry on Wednesday sought his support against cheap imports.
The president of the electrical equipment industry association, Indian Electrical and Electronics Manufacturers Association, J G Kulkarni wrote a letter to the PM, seeking his intervention to revive the industry.
The apex body pushed for limiting participation in tenders in bidding for domestically funded projects to domestic manufacturers only. The industry body wants the government to stipulate a minimum percentage of the total procurement by any utility to be of ‘Made in India’ products, in cases where domestic built-up capacity standing under-utilised.
“The government should also stipulate some amount of price preference for Indian products in procurement by utilities,” IEEMA said.
The $25 billion electrical equipment industry, wants the government to introduce a uniform basic customs duty of 10 per cent on all electrical equipment. Currently, transmission and distribution equipment attracts 7.5 per cent duty, and generation equipment has five per cent duty. IEEMA lobbied for a procurement guidelines model for utilities framed by the government, with standard product specifications and design parameters.
“These measures will support Indian manufacturers, who are not seeking protection but a level playing field, and provide necessary safeguards to the domestic industry that is facing non-market competition on account of cut throat below-cost entry level prices offered by Chinese manufacturers,” said Kulkarni.
In the last financial year, the transmission and distribution equipment sector has seen a negative growth of 7.8 per cent, for the first time in 10 years. “The industry has experienced hardly any growth in capital expenditure. Manufacturers are working at less than 70 per cent of their production capacity,” IEEMA said, in a press release.
During the last seven years, India’s imports of electrical equipment have increased at a compound annual growth rate (CAGR) of 24.7 per cent and were at Rs 64,674 crore in 2012-13.
China’s share in Indian imports of electrical equipment has dramatically increased in the last few years and it stands at 45 per cent in 2012-13, from 15.3 per cent in 2005-06. Imports from China have grown at a CAGR of 45.5 per cent in the last seven years and were Rs 29,054 crore in 2012-13.
