Use local made power equipment for govt-funded projects: CEA
“Domestically funded projects of Ministry of Power or Central PSUs or projected funded by PFC and REC or by state power utilities, the procurement of equipment/material should be made from domestic/ local manufacturers through local competitive biddings,” CEA said in a letter to authorities concerned.
The CEA said that domestic manufacturers have invested heavily in technology transfer from their principals or have developed technology indigenously, for creating/expanding manufacturing capacities, manpower and skill development to meet the growing demand. Underutilisation of existing manufacturing facilities has become a matter of concern because of large scale penetration of foreign equipment/material in power sector.
The CEA also said that in the absence of domestic manufacturing facility, foreign players may be allowed to participate in tendering process through a joint venture or consortium with Indian firms and they would have to establish manufacturing facility in here in India within a specified time. Following the CEA directive, Indian Electrical & Electronics Manufacturers’ Association (IEEMA) has welcomed the move saying that it will go a long way to address the underutilisation of existing manufacturing facilities of domestic electrical equipment manufacturers.
“The decision will also address the concern of large scale penetration of foreign equipment in the sensitive power sector. This decision will go a long way in making Make in India a reality,” IEEMA Director General Sunil Misra said. According to IEEMA, during 2005-06 to 2013-14, India’s imports of electrical equipment have increased at a compound annual growth rate (CAGR) of 19.73 per cent in rupee terms and were at Rs 58,354 crores ($9.7 billion) in 2013-14.
China’s share in Indian imports of electrical equipment has dramatically increased in the last few years and now it stands at 38.87 per cent (2013-14) of the total from 15.26 per cent in 2005-06.
Imports from China have grown at a CAGR of 34.57 per cent in the last eight years and were INR 22,680 crores ($3.8 billion) in 2013-14, it added. Domestic electrical equipment manufacturing industry suffers a significant disadvantage vis- -vis imports due to sales tax / VAT, entry tax / octroi; higher financing cost; lack of quality infrastructure; critical raw material and components, etc, it further said.