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The growth rate of the Indian electrical equipment industry decelerated to 6.6 per cent last fiscal.
The industry grew at 11.3 per cent in 2009-10 and 13.7 per cent in 2010-11, the Indian Electrical and Electronics Manufacturers’ Association (IEEMA) said.
IEEMA, which has over 750 member-industries, is the apex association of manufacturers of electrical, industrial electronics and allied equipment.
The deceleration is due to sluggish growth in the power sector and escalating imports of electrical equipment. All three segments of the power sector — generation, transmission and distribution — are facing several challenges which need to be addressed expeditiously, it said.
IEEMA said the growth in the capacitor, switchgear and transmission line segment in 2011-12 turned negative, indicating a slowdown in industrial capex and off-take due to credit squeeze and high interest costs. The cable segment alone showed double digit growth of 25.7 per cent for the year.
The absence of a level playing field for the domestic industry to compete with imported electrical equipment, especially from China, was clear.
Imports in the past five years have grown at a CAGR of 28.28 per cent.
The current export-import trends based on trade data from 27 major ports points to a rise in the import of 765 kV transformers and reactors (mostly through power project imports), insulators, LV switchgear and HV cables.
The total Imports of 765 kV transformers and reactors in 2011-12 was Rs 1,229 crore. In Q4 FY12, there was a 125 per cent increase (Rs 687 crore) over total imports in the first three quarters (Rs 542 crore), IEEMA said.
Mr Ramesh Chandak, president, IEEMA, said, “There has been continuous under-investment in the T& D sector. This lopsided investment pattern needs to be corrected. This will resolve some of the power problems and will also provide balanced growth.”
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