Market share shrinking due to Chinese imports, say power gear makers

The domestic power equipment industry says it is being edged out and under-cut by Chinese imports.

Due to capacity underutilisation on account of demand contraction in the past few years and indirect subsidies being given to Chinese manufacturers, the local industry’s market share is dwindling.

Sunil Misra, Director-General of Indian Electrical and Electronics Manufacturers’ Association (IEEMA), told

Business Line the Chinese manufacturers of electrical equipment get 17 per cent export subsidies on the value of the products, social security subsidies and lower income tax rate (about 15 per cent). “All these put together a Chinese manufacturer gets 24 per cent pricing advantage when exporting. China is also offering credit to foreign buyers on very soft terms to finance their imports,” Misra added.

China’s share in the Indian electrical equipment market stood at 44.92 per cent in 2012-13, up from 15.26 per cent in 2005-06, according to IEEMA data. “Imports from China have grown at a CAGR of 45.46 per cent in the last seven years and were at Rs 29,054 crore in FY2013,” the official said.

“This disproportionate reliance on imported power equipment, with uncertain quality and lifecycle, and with no domestic facility to provide instant repairs, or spare supplies and replacement especially for heavy equipment, is fraught with long-term risks,” Misra said.

>jayanta.mallick@thehindu.co.in