IEEMA welcomes Planning Commission move asking CEA report

IEEMA welcomes Planning Commission move asking CEA reportIEEMA welcomes the move of the Planning Commission asking for the recent report submitted by the Central Electricity Authority (CEA) to the Ministry of Power on the performance of Chinese electrical equipment installed in India.Last month, IEEMA had represented to the prime minister that the commercial viability of domestic electrical equipment industry was under a severe threat due to escalating imports of electrical equipment, especially from China, which is impacting both the top-line and bottom-line of the manufacturers.In its letter to the prime minister, IEEMA had highlighted that imports of electrical equipment in the country had assumed very threatening proportions and had captured close to 40 per cent of the market for electrical equipment in India, whereas there was significant underutilisation of installed domestic capacity, resulting in loss of employment of qualified engineers, technicians, workers etc.Domestic electrical equipment manufacturing industry suffers a significant disadvantage vis-à-vis imports due to sales tax/VAT, entry tax/octroi, higher financing cost, lack of quality infrastructure, dependence on foreign sources for critical raw material and components etc. In addition, Chinese manufacturers of electrical equipment are given by their government export subsidies as high as 17 per cent of the export value, social security subsidies, lower income tax rate (15 per cent) and access to financing at low rates of interest, which gives Chinese companies over 24 per cent unfair pricing advantage and allows them to price their products very competitively. Further, China is also offering credit to foreign buyers on very soft terms to finance their imports. As a result, imports from China are escalating every year. All these are making the Indian industry non-competitive in its own country, according to IEEMA.IEEMA has petitioned the Government of India to provide greater encouragement to indigenous manufacturing as done by several countries, including China, by raising the basic customs duty (BCD) on all electrical equipment products to a uniform 10 per cent (currently, 7.5 per cent on transmission and distribution equipment and 5 per cent on generation equipment).