Power equipment manufacturers in India have urged the government to hike import duty in order to curb the threat posed by cheap power equipment imported from foreign countries, thereby protecting the interests of the domestic players Domestic power equipment manufacturers have for long been voicing their concerns about cheap power equipment being procured from foreign countries, which is having an adverse effect on their business. Industry players are of the opinion that the government must take immediate steps to counter the threat posed by foreign countries particularly China in this regard and increase import duty on power equipment. This feeling has been echoed in a survey conducted by Machinist360, where whooping 100% respondents were of the view that the government should hike import duty on power equipment.
Need to create a level playing field
In this regard, Abdul Sheik, managing director of Zar Power Equipments, a mid-sized power equipment dealer in Mumbai says, “It is essential to create a level playing field for domestic players who have been losing their client base to foreign firms. Higher import duties will increase the demand for power equipment manufactured in the country.” It should be noted that currently power equipment imported for mega power projects, which are add up to 1,000 megawatt (MW) and above, attract no duty. However, a 5% duty is levied on equipment imported for minor power projects.
 Even the Planning Commission in its report submitted to the government last month has recommended a hike in import duty on power equipment. Vilasrao Deshmukh, minister of heavy industries, while addressing reporters last month had said that his Ministry has suggested the Finance Ministry to levy 10% customs duty along with 4% additional duties in order to safeguard the interest of domestic players.“While import duty on foreign products in the country is low, the picture is very different on the other side. Most of the foreign countries levy high import duty on power equipment, which makes it extremely difficult for Indian companies to compete in those markets,” says M Chandrashekhar, manager of Manu Power Equipments Private Limited, a small-sized power equipment dealer in Hyderabad.
The situation turns further grim considering the fact that the Eleventh Five Year Plan aims to add 61,237 MW of thermal power for which equipment adding up to 21,000 MW are scheduled to be imported from China. Arup Choudhury |
