Indian electrical and electronic equipment makers have been steadily losing ground to the Chinese over the last few years.

Imports from China constitute 45 per cent or Rs 29,054.46 crore of the total imports of Rs 64,673.62 crore in 2012-13, according to Indian Electrical and Electronics Manufacturers Association (IEEMA).

While total imports grew at a seven-year compounded annual growth rate of 25 per cent, Chinese imports grew 45 per cent in the same period.

The industry comprises two segments – generation equipment, transmission and distribution (T&D) and other equipment such as transformers, cables and switchgear.

The industry clocked revenues of Rs 1.30 lakh crore in FY13.

The Chinese dominance, primarily due to lower pricing, has also led to deceleration in the domestic segment. For the first time in 10 years, the T&D equipment sector saw a decline of 7.8 per cent in revenues during 2012-13, said Sunil Mishra, Director-General, IEEMA.

Mishra said the T&D equipment makers were working at less than 70 per cent capacity and the sluggishness of the economy had only compounded their woes. Similar is the case with the generation equipment makers.

Mishra said what was more worrisome was the disproportionate reliance on imported power equipment with no domestic manufacturing facility to provide immediate repairs, spares and replacements in a critical sector such as power.

The Government recently allowed Chinese heavy equipment makers to set up service centres in the country, which he said was required given the quantum of imports.

On the brighter side, the Indian industry exported $ 4.9 billion (about Rs 31,000 crore) worth of electrical equipment in FY13 and is increasing looking to accelerate exports to make up for the fall in domestic demand.

Indian electrical equipment makers appear to have decided that exports are far more lucrative than battling it out with Chinese imports and the debt-saddled State electricity boards across the country.

> shanker.s@thehindu.co.in

Related Topics