For the first time in 10 years, the Indian electrical equipment industry has shrunk 2.4 per cent in Q1 FY13.
It was 13.82 per cent in Q1FY12 and 14.10 per cent in Q4 FY12.
Furnishing the data, the Indian Electrical and Electronics Manufacturers Association (IEEMA), said the industry size was about Rs 135 crore ($25 million).
IEEMA is the apex body electrical, industrial electronics and allied equipment manufacturers.
Mr Ramesh Chandak, President, IEEMA said, “In recent years, a surge in imports of cheap and inferior quality electrical equipment from abroad is significantly impacting the Indian electrical equipment industry with under-utilisation of recently enhanced capacities across several products.
Viability dented
“The commercial viability of the industry is getting dented and can have severe long-term consequences, leading to a situation of unnecessary dependence on imports at the cost of domestic manufacturing.’’
Ironically in Q1 FY13, there was over-achievement of the country’s power generation and transmission and sub-stations capacity addition targets.
So, under ideal conditions, domestic manufacturers of power equipment should have correspondingly gained business, but reality is otherwise, he added.
The transformer industry shed 7.6 per cent in Q1 FY13 against a growth of 6.6 per cent in Q1 FY12.
The capacitor and cable industry saw a drop of 24.8 per cent and 12.9 per cent as against growth of 20.9 per cent in capacitors and 44.6 per cent in cable in Q1 FY12. The rotating machines industry dropped 2.6 per cent from growth of 9.6 per cent.
Transformer, rotating machine and capacitor industries have been decelerating q-o-q and have seen a turned negative, which implies a distinct slowdown in industrial capital expenditure and slowdown in off-take due to credit squeeze and high interest cost, he said.