New Delhi: Concerned over the continuous decline in the domestic electrical equipment industry, the government has been pondering on savouring the domestic markets from being eaten up by cheaper Chinese products.

The government has arrived on a conclusion that certain concessions can be provided to encourage the competition amidst the domestic players without enhancing the import duties on foreign goods.
The increasing tendency of using imported Chinese plants in domestic power projects has raised the troubles of the domestic electrical equipment producing companies. Especially, the private power companies rely more on imported China-manufactured power equipments due to their faster supply and cheap rates.

The ongoing trend registered a significant fall in the orders received by BHEL and L&T for electrical equipments against which the domestic power companies were raising the demand of increasing import duty on electrical goods brought from China.

According to sources, the government may provide some relief to the domestic companies in production tax and other local taxes. However, the final decision in this regard rests with the Finance Ministry.
A high level meeting was called by Heavy Industries Minister Praful Patel in which the domestic electrical equipment industry demanded hike in import duties. Meanwhile, the Association of Power Producers has already written a letter to the Finance Ministry on Wednesday against any such initiative. However, no decision could be taken in this regard.

For the record, there is a provision of rebate in 5 percent additional import duty on projects of 1,000 megawatts which has been a booster in use of such imported electrical equipments.

However, the domestic industry believes that the electrical equipment industry is capable to meet the country’s requirement. Currently, the domestic industry had production capacity of 20,000 mw, which has to be further increased by another 15,000 mw. Therefore, there is no scope for a delay in the supply of electrical equipments.

JPN/bureau