The Indian Electrical and Electronics Manufacturers Association (IEEMA) has released the Q1 FY13 performance of the US$25 billion Indian electrical equipment industry. For the first time in 10 years, the Indian electrical equipment industry has seen a negative growth of 2.4% in the first quarter (Q1) of the current fiscal (2012-13) compared to the corresponding period of Q1 FY12 (13.82 %) and sequential quarter Q4 FY12 (14.10%).
Ramesh Chandak, President, IEEMA said, “Ironically in Q1 of FY13, there was over-achievement of the country’s power generation and transmission &sub-stations capacity addition targets. So, under ideal conditions, domestic manufacturers of power equipment should have correspondingly gained business, but reality is otherwise. In recent years, a surge in imports of cheap and inferior quality electrical equipment from abroad is significantly impacting the Indian electrical equipment industry with under-utilisation of recently enhanced capacities across several products. The commercial viability of the industry is getting dented and can have severe long term consequences, leading to a situation of unnecessary dependence on imports at the cost of domestic manufacturing.’’
“The domestic electrical equipment industry, because of its heterogeneous character and despite its critical role in the economy, has not received focused attention of the policy makers. In the telecom sector, the government has initiated a move to make it mandatory for all telecom companies to procure at least 30% of all electronic equipment domestically on security grounds. The power sector is of at least as much strategic importance as the telecom sector, if not more. Disproportionate reliance on imported power equipment, with uncertain quality and lifecycle, and with no domestic manufacturing facility to provide immediate spares, replacements, etc. especially for heavy equipment, is fraught with long term risks”, he further added.
