IEEMA Live
Indian Electrical Equipment Industry records negative growth of 2.4% in Q1 FY13 – First Time in 10 Years
Tollfree No. 1800-3000-0912
IEEMA Members Helpline No.
022–66605754
10:00 hrs - 17:00 hrs
  • Indian electrical equipment industry for the first time in 10 years has registereda negative growth (2.4 %),
  • Transformer, capacitor and rotating machines industries have shown negative growths of 7.6%, 24.8% and 2.6% respectively compared to the corresponding period of last year,
  • Industry witnessed surge in imports by 100% for insulators, motors andgenerators,
  • Industry seeks urgent intervention from Central Government at the highest level for conducive policy initiatives while entering into 12th Plan so as to meet laid down targets of power generation capacity and related transmission & distribution capacity expansions.

Mumbai / N. Delhi ,August 28, 2012: The Indian Electrical and Electronics Manufacturers Association (IEEMA), the apex Indian industry association of manufacturers of electrical, industrial electronics and allied equipment today 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%).

The transformer industry has seen a negative growth of 7.6 % in Q1 FY13 against the growth of 6.6% for the corresponding period of Q1 FY12. The capacitor and cable industry has witnessed a double digit negative growth of 24.8% and 12.9% respectively compared to the positive growth of 20.9% (capacitor) and 44.6% (cable) in Q1 FY12. The rotating machines industry has witnessed a negative growth of 2.6% in Q1 FY13 against the growth of 9.6% for corresponding quarter of last year.

The transformers, rotating machines and capacitor industries has been decelerating every sequential quarter and has seen a negative growth in Q1 FY13, implying distinct slowdown in industrial capex activities and slowdown in off-take by users due to credit squeeze, high interest costs, etc.

The growth in switchgear industry has been consistent, registering an increase by 2.4 % compared to 2.5% in corresponding quarter of last year.

Commenting on the Q1 FY13 results, Mr. 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.

The double whammy is that while the Indian electrical equipment industry has recorded a negative growth, imports have increased by 100% for insulators, motors and generators.According to IEEMA, Indian electrical equipment manufacturers are facing a tough competition in the domestic market from foreign suppliers. Absence of a level playing field for the domestic industry to compete with imported electrical equipment, especially from China, is a clear and present threat. While, Indian imports of electrical equipment have grown in the past five years at a CAGR of 28.28%, China’s share in Indian imports of electrical equipment has dramatically increased in the last few years and now it stands at around 44% of the total from around 15% in 2005-06. Imports from China have grown at a CAGR of 59% in the last five years.

The domestic electrical equipment industry is not looking for any protection but wants a level playing field. The government needs to provide greater encouragement to indigenous manufacturing in strategic sectors, as done by several countries including China.IEEMA has been asking for (1) limiting participation in tenders for bidding for domestically funded projects to domestic manufacturers only with tightened quality requirements so that only good quality & reliable equipment comes into the country; (2) putting in place a mandatory requirement of setting up a manufacturing facility in India, within a specified time frame of the award of the tender, where foreign bidding is allowed, to provide for level playing field bidding, that is, phased manufacturing process (PMP) should be made mandatory in the country for supply of major equipment; (3) stipulating a minimum percentage of the total procurement by any utility to be of ‘Made in India’ products; and (4) Protecting the domestic industry’s interests under different Regional Trade Arrangements (RTAs).

Thus, the Industry seeks urgent intervention from the Central Government at the highest level for conducive policy initiatives while entering into 12th Plan so as to meet laid down targets of power generation capacity and related transmission & distribution capacity expansions.

There has been over achievement in Addition to Power Gen. (5266MW) and 765 KV Transmission & Sub-Stations.

In EXIM trend, Imports increases by more than 100% for Insulators (150 crores) and Motors & Generators (200 crores) in Q1 FY13

In the Growth Index, Cable & Transformers segments which account for 48% weightage have declined. Transmission Towers & Conductors and Switchgear are showing some growth.

Growth Indices for Electrical Equipment Industry
Cumulative Growth Compared to same period of previous year
Product Weightage April – June 2012-13 (% Growth)
Rotating Machines 10.0 -2.6
Switchgear 15.2 2.4
Cables 27.3 -12.9
Transformers 19.3 -7.6
Capacitors 0.9 -24.8
Energy Meters 3.9 -3.1
Transmission Lines 23.4 12.2
Overall IEEMA Electrical Equipment Growth Index 100 -2.4
0 Comments

Leave a reply

CONTACT US

We're not around right now. But you can send us an email and we'll get back to you, asap.

Sending
©2017. All rights reserved.

Log in with your credentials

Forgot your details?