After telecom, the Indian government is applying the brakes on the import of cheap Chinese power equipment that is hurting domestic manufacturers, since the Chinese government provides high subsidies to its power equipment suppliers.
Chinese power equipment manufactures have zeroed in on India's planned addition of 60,000 mega-watts of power capacity from 2007 to 2012 and hope to corner 30 per cent of the capacity by supplying equipment to local power companies at 15 per cent lower than what it would cost to source from Indian power manufacturers.
With equipment costs making up for almost 80 per cent of the cost of setting up a power plant, Chinese companies like Dongfang Electric Corporation, Shanghai Electric, Harbin Power Equipment Company Ltd and SEPCO are thriving in India due to the economies of scale, and the Chinese government's export subsidiesas and the undervalued yuan.
Domestic equipment manufacturers like state-owned BHEL and L&T have raised the issue of the advantages Chinese equipment suppliers have over them, with the Indian government.
Associated Chambers of Commerce and Industry of India (Assocham) has been asking the Indian government since June last year, to impose tariff barriers on Chinese power equipment imports.
The Chamber had said that domestic power equipment manufacturers have lost business opportunities to supply power equipment to Indian power producers of 50,000 MW of capacity.
Domestic power producers like Reliance ADAG, Adani and Jindal Power have placed orders with Chinese power equipment companies worth Rs2,50,000 crore since Chinese equipment are 10-15 per cent cheaper due to China subsidising its exports by completely exempting them from internal duties.
Assocham says, "Chinese government provides incentives and rebates of 14 per cent to it's power plant manufacturers for exports and at the same time when such power equipment is imported into India, it does not suffer from customs duty or countervailing duty (CVD) and special CVD, etc."
''On the other hand, Indian manufactured equipment, even when given 'deemed export' status for supply to specified projects, suffers duties and taxes to an extent of nearly 6 per cent of the equipment cost.''
According to Assocham, if Indian manufacturers have to export power equipment to China, the Chinese government imposes tariff and non-tariff barriers as high as over 50 per cent of equipment cost.
BHEL and L&T officials admit that Chinese companies have a 14 per cent price advantage over Indian companies.
India's current power generation capacity is 153,000 MW and expects to add an additional 62,000 MW by 2012, which has thrown up tremendous opportunities for power generation companies and equipment suppliers.
Since Indian power equipment companies do not have the capacity to meet local demand, domestic power producers have placed orders with Chinese firms for projects worth 44,000 MW.
Stae-owned BHEL, India's largest power equipment manufacturer, has annual manufacturing capapcity of of generation equipment of upto 10,000 MW and hopes to double this capacity to 20,000 MW. (See: BHEL to hire 4000 people a year amid expansion)
The government now wants local companies to enhance their capacities in order to meet its power generation targets for 11th and 12th five-year plans.
India is now bypassing Chinese companies in favour of local manufacturers as the government is also concerned about the Chinese companies bringing in their workforce into the country, which could pose an added security problem.
The government is also concerned about the operations, maintenance and availability of spare parts of Chinese power equipment sold in India, especially after many power companies complained of the cheap quality of Chinese equipment.
In 2008, the turbine blades at the 300-MW Sagardighi thermal power station in West Bengal supplied by Dongfang collapsed within weeks of the station commencing commercial generation.
Sterlite Industries, which had installed a 540-MW (4x135 MW) captive power plant using equipment supplied by SEPCO of China, was so unhappy with the equipment that it placed an advertisement in the papers seeking reputed and experienced agencies to help improve boiler availability and efficiency, review of design and to improve reliability and augmentation of output.
India is now trying to block Chinese power equipment imports just as it informally asked Indian mobile operators last month not to import and install any telecom equipment manufactured by Chinese companies like Huawei Technologies, and ZTE.
domain-b.com : After telecom, India halts Chinese power equipments suppliers
An overview of the so called Chinese fair trade practices.No wonder chinese exports flooding world over due to as many hidden subsidies and tax exemptions.. and ofcourse low quality is the key
Chinese power equipment manufactures have zeroed in on India's planned addition of 60,000 mega-watts of power capacity from 2007 to 2012 and hope to corner 30 per cent of the capacity by supplying equipment to local power companies at 15 per cent lower than what it would cost to source from Indian power manufacturers.
With equipment costs making up for almost 80 per cent of the cost of setting up a power plant, Chinese companies like Dongfang Electric Corporation, Shanghai Electric, Harbin Power Equipment Company Ltd and SEPCO are thriving in India due to the economies of scale, and the Chinese government's export subsidiesas and the undervalued yuan.
Domestic equipment manufacturers like state-owned BHEL and L&T have raised the issue of the advantages Chinese equipment suppliers have over them, with the Indian government.
Associated Chambers of Commerce and Industry of India (Assocham) has been asking the Indian government since June last year, to impose tariff barriers on Chinese power equipment imports.
The Chamber had said that domestic power equipment manufacturers have lost business opportunities to supply power equipment to Indian power producers of 50,000 MW of capacity.
Domestic power producers like Reliance ADAG, Adani and Jindal Power have placed orders with Chinese power equipment companies worth Rs2,50,000 crore since Chinese equipment are 10-15 per cent cheaper due to China subsidising its exports by completely exempting them from internal duties.
Assocham says, "Chinese government provides incentives and rebates of 14 per cent to it's power plant manufacturers for exports and at the same time when such power equipment is imported into India, it does not suffer from customs duty or countervailing duty (CVD) and special CVD, etc."
''On the other hand, Indian manufactured equipment, even when given 'deemed export' status for supply to specified projects, suffers duties and taxes to an extent of nearly 6 per cent of the equipment cost.''
According to Assocham, if Indian manufacturers have to export power equipment to China, the Chinese government imposes tariff and non-tariff barriers as high as over 50 per cent of equipment cost.
BHEL and L&T officials admit that Chinese companies have a 14 per cent price advantage over Indian companies.
India's current power generation capacity is 153,000 MW and expects to add an additional 62,000 MW by 2012, which has thrown up tremendous opportunities for power generation companies and equipment suppliers.
Since Indian power equipment companies do not have the capacity to meet local demand, domestic power producers have placed orders with Chinese firms for projects worth 44,000 MW.
Stae-owned BHEL, India's largest power equipment manufacturer, has annual manufacturing capapcity of of generation equipment of upto 10,000 MW and hopes to double this capacity to 20,000 MW. (See: BHEL to hire 4000 people a year amid expansion)
The government now wants local companies to enhance their capacities in order to meet its power generation targets for 11th and 12th five-year plans.
India is now bypassing Chinese companies in favour of local manufacturers as the government is also concerned about the Chinese companies bringing in their workforce into the country, which could pose an added security problem.
The government is also concerned about the operations, maintenance and availability of spare parts of Chinese power equipment sold in India, especially after many power companies complained of the cheap quality of Chinese equipment.
In 2008, the turbine blades at the 300-MW Sagardighi thermal power station in West Bengal supplied by Dongfang collapsed within weeks of the station commencing commercial generation.
Sterlite Industries, which had installed a 540-MW (4x135 MW) captive power plant using equipment supplied by SEPCO of China, was so unhappy with the equipment that it placed an advertisement in the papers seeking reputed and experienced agencies to help improve boiler availability and efficiency, review of design and to improve reliability and augmentation of output.
India is now trying to block Chinese power equipment imports just as it informally asked Indian mobile operators last month not to import and install any telecom equipment manufactured by Chinese companies like Huawei Technologies, and ZTE.
domain-b.com : After telecom, India halts Chinese power equipments suppliers
An overview of the so called Chinese fair trade practices.No wonder chinese exports flooding world over due to as many hidden subsidies and tax exemptions.. and ofcourse low quality is the key
