The country’s electrical equipment industry has witnessed 6 per cent growth in the first six months of 2013-14 due to a rise in domestic demand, said the Indian Electrical and Electronics Manufacturers’ Association . This is against a contraction of 7.8 per cent in production in the first six months of 2012-13.
“Domestic demand, coupled with increase in exports, has managed to keep the industry afloat. The industry needs to build a robust export portfolio so that it can optimally utilise its built-up capacity which is currently under-utilised across all sub-sectors,” said Raj Eswaran, President of the industry body.
The equipment makers saw 9.8 per cent growth in the second quarter, while it grew 2 per cent during the first quarter. The industry size is pegged at around Rs 1.30 lakh crore
However, the industry continues to face a credit crunch , delays in project execution and non-adherence of payment terms by customers, mainly power utilities. This has resulted in unmanageable cash flow problems across the industry.
Rupee depreciation has made more expensive imported raw material and inputs for electric equipment. Given the continued threat from imports of electrical equipment in the Indian market, however, domestic manufacturers are being forced to absorb the additional cost to remain competitive, IEEMA said.
Overall imports of electrical equipment have contracted . But, imports of power transformers, insulators, cables (mainly through power project import route) and AC motors and generators have continued to increase.
In 2012-13, the import share was 38.26 per cent of the market ,. There was significant under-utilisation of installed domestic capacity.