The Heavy Industries Minister, Mr Praful Patel, said on Thursday that his Ministry supports the demand of local power equipment makers for the imposition of a 14 per cent duty on imported power gear.
“There is a strong case for a tax on imported equipment… Besides tariff barriers, other options are also being looked at,” Mr Patel told reporters.
Earlier in the day, Mr Patel had met top executives from domestic power equipment firms such as Bharat Heavy Electricals Ltd, Larsen & Toubro Ltd and Bharat Forge Ltd, as well as power generation major NTPC Ltd, on the demand by power equipment firms for a level playing field vis-à-vis imported gear.
Apart from industry players, senior officials of the Ministries of Heavy Industries, Power and Commerce attended the meeting.
Other options
There was, however, no decision on the proposal for levying 14 per cent duty on imported power equipment. Other options on the table include action in the form of safeguards or anti-dumping measures that could be examined by the domestic manufacturers affected by cheap Chinese imports, in consultation with the Commerce Ministry.
The issue comes up at a time when equipment contracts for around 37,626 MW of upcoming power capacity are estimated to have been placed with Chinese vendors. Currently, equipment imports attract zero levy under the Centre's Mega Power Policy for thermal projects of 1,000 MW and above.
Levelling the field
The problems faced by domestic gear manufacturers vis-à-vis equipment imports has been flagged at the highest levels in the Government and the issue has been listed at least thrice to be taken up by the Union Cabinet in the past 12 months. A decision, however, has been deferred amid lobbying from user groups in favour of deploying Chinese gear in their projects.
Earlier, a panel headed by the Planning Commission Member, Mr Arun Maira, had proposed that a 14 per cent duty differential faced by domestic firms needed to be bridged for mega and ultra mega power projects. This was suggested through the levy of a 10 per cent Custom duty and 4 per cent Special Additional Duty (SAD).
“We're not asking for protection, only level-playing field... there seems to be a consensus on this,” Larsen and Toubro's chief, Mr A.M. Naik, told reporters after the meeting.