Centre calls for positive list of items from heavy equipment sector

Even as India’s power equipment industry is faced with challenges including the competition from Chinese players, government is mulling changes in policies to encourage fresh investments in heavy equipment sector including electrical and electronics industry in the country, informed senior government official here on Friday.

Eyeing underutilization of capacities for Indian heavy electrical equipment makers, the government is all set to revise the free trade agreements (FTAs) with trade partner nations to promote export of Indian equipments. In order to facilitate smooth revision of the FTAs, the government has also urged the industry to come up with a positive list of equipments, for which they can easily compete with the foreign players, top government official said.

At the fifth CII - Gujarat Manufacturing Show 2014 held in Ahmedabad, K K Tiwari, industrial advisor, Ministry of Heavy Industries & Public Enterprises, Government of India expressed the need to encourage exports of electrical equipments from India.

“There is a need to focus more on exports if the electrical equipment industry wants to survive and compete in the global market,” said Tiwari. India currently exports about US $ 5 billion worth of electrical equipment, where as the imports are worth US $ 15 billion, which is expected to increase to US $ 23 billion by 2022. The government has set the target to match exports with imports by 2022.

Tiwari noted that for the first time in past decade, the industry witnessed negative growth of 7.8 per cent in 2012-13. Rate of capacity utilization stood at 70 per cent. “Demand is low and stocks are high. This would change once our exports pick up,” said Tiwari.

Under the Central government’s Mission Plan for 2022 for this industry, electrical equipment production is expected to increase to US $ 100 billion (around Rs 6 lakh crore) by 2022 from the current US $ 35 billion (approx Rs 2.10 lakh crore) in 2011-12 by balancing exports and imports.

Commenting on the growth prospects of power equipment industry in India S K Negi, MD, Gujarat Energy Transmission Company Ltd (GETCO), maintained that economy of scale was necessary to be globally competitive. “To gain competitiveness in international and domestic market, the industry needs to adopt practice of global sourcing wherein cheaper raw material, best manpower and technology and efficient automation system should be sourced from all over the world.”

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