Indian electrical equipment industry records negative growth

Indian electrical equipment industry records negative growthLow domestic demand and high imports hit Indian electrical equipment industry in FY 12-13India’s local electrical equipment makers have witnessed the most challenging times in the $25 billion industry registering a negative growth of 8 per cent due to sluggish demand and higher imports for FY 12-13, for the first time in 10 years and in absence of any protective policy measures, according to the annual industry data released by the Indian Electrical and Electronics Manufacturers’ Association (IEEMA).IEEMA, which is the apex association of manufacturers of electrical, industrial electronics and allied equipment, said the industry had clocked a growth of 6.6 per cent in FY11-12 and was facing massive project execution delays, mostly by the state-run transmission and distribution companies and an unprecedented credit squeeze due to economic slowdown. The worst hit were the transformers which registered a degrowth of 26 per cent in FY 12-13 compared to a growth of 25 per cent in FY 11-12 and capacitators makers, where the negative growth widened to a massive 24 per cent from a mere $1.8 in FY 11-12. All, except the transmission sector, decelerated in the last fiscal year. “An efficient power supply system is a key ingredient for economic growth and quality of life. The electrical equipment manufacturing industry requires the focused attention of the government to protect our interests by providing us a level playing field that would equip the industry to fight imports,” said J G Kulkarni, President – IEEMA.Slackening demand in the power sector, continuous rise in imports of electrical equipment, especially China and South Korea and an absence of a level playing field is threatening the existence of the Indian players. The imports of electrical equipment have grown more than 20 per cent in the last fiscal, thus eating into the domestic manufacturer’s pie. The import-export data from 27 ports across the country indicate a sorry state of affairs given the significant rise in imports of 765 kV transformers (Power) and reactors, insulators, LV switchgears and HV cables.However, exports of electrical equipment, led by demand in Africa and some other countries, have also risen significantly; especially of AC generators, switchgears, transmission towers and energy meters.The IEEMA is also encouraged by the initiative of the Department of Heavy Industry (DHI), Government of India, of taking a holistic view and formulating the Indian Electrical Equipment Industry Mission Plan 2012-2022. It is keen to down a clear roadmap for enhancing the competitiveness of the domestic electrical equipment industry.IEEMA believes that assured availability of quality power at reasonable cost will not only act as a catalyst in the socio-economic development of the nation but also enhance the global competitiveness of the domestic industry leading to greater employment generation and higher levels of per capita income.