The Heavy Industries Ministry has written to the Finance Ministry seeking an additional 5 per cent import duty on power equipment. At present, there is 21 per cent duty on such equipment.
“We have sought 5 per cent additional customs duty on imported power equipment from the Finance Ministry to protect the interest of domestic industry,” Heavy Industries Minister Praful Patel told reporters on the sidelines of an event organised by the Indian Electrical and Electronics Manufacturers Association.
This development comes at a time when domestic power equipment makers, including BHEL, are facing a tough time due to overall economic sluggishness and cheaper imports, mainly from China.
“I think the Government has recognised that import of power equipment needs to be arrested and for that reason there has been a duty on imports of electrical equipment.” This has resulted in independent power producers approaching companies such as BHEL and L&T for such equipment.
In July last year, the Government had imposed a 21 per cent import duty on power equipment. This includes 5 per cent basic customs duty, 12 per cent countervailing duty and 4 per cent special additional duty on import of power gear.
Stressing on the need for Government intervention to protect the domestic industry, Patel said every country looks at its own interest. “Countries such as the US and China exercise control to protect the interest of their domestic industry. We also have a huge responsibility in developing our nation and should look at new ways. Some government intervention is required to protect the domestic industry,” he added.
Patel noted that domestic players, such as BHEL and L&T, had actually added huge capacities, but the slowdown in power sector has had an adverse impact. “So, it’s a situation where we will have to correct this imbalance at the earliest,” he said.
Auto Industry
Patel said he would talk to the Prime Minister and the Finance Minister and seek some relief for the automobile industry, which is reeling under seven straight months of slow demand and production decline. Many automobile companies have started laying off workers and this should not be allowed to happen, Patel added.
“This must be arrested and the decline must stop... the auto industry must get a stimulus,” he said, adding that the sector alone contributes 25 per cent to manufacturing GDP.