Industry reports a negative growth of 8%
- The electrical equipment industry registers a negative growth of 8% for the first time in 10 years
- Local players severely hit by delays in project execution and higher imports
- Indian manufacturers face unprecedented credit squeeze and repayments
- Power cable industry worst hit after suffering a negative growth of 26% (YoY)
- Capacitors makers registered a negative growth of 24% (YoY)
- Electrical Equipment Industry Mission Plan to rescue the local industry
India’s local electrical equipment makers have witnessed the most challenging times in the $25 billion industry registering a negative growth of 8% due to sluggish demand and higher imports for FY 12/13, for the first time in 10 years and in absence of any protective policy measures, according to the annual industry data released by the Indian Electrical and Electronics Manufacturers’ Association (IEEMA).
IEEMA, which is the apex association of manufacturers of electrical, industrial electronics and allied equipment, said the industry had clocked a growth of 6.6% in FY11/12 and was facing massive project execution delays, mostly by the state-run transmission and distribution companies and an unprecedented credit squeeze due to economic slowdown.
The worst hit were the transformers which registered a degrowth of 26% in FY 12/13 compared to a growth of 25% in FY 11/12 and capacitators makers, where the negative growth widened to a massive 24% from a mere $1.8 in FY 11/12. All, except the transmission sector, decelerated in the last fiscal year.
“An efficient power supply system is a key ingredient for economic growth and quality of life. The electrical equipment manufacturing industry requires the focused attention of the government to protect our interests by providing us a level playing field that would equip the industry to fight imports,” said Mr. J. G. Kulkarni, President – IEEMA.
Slackening demand in the power sector, continuous rise in imports of electrical equipment, especially China and South Korea and an absence of a level playing field is threatening the existence of the Indian players. The imports of electrical equipment has grown more than 20% in the last fiscal, thus eating into the domestic manufacturer’s pie.
The import-export data from 27 ports across the country indicate a sorry state of affairs given the significant rise in imports of 765 kV transformers (Power) and reactors, insulators, LV switchgears and HV cables.
However, exports of electrical equipment, led by demand in Africa and some other countries, have also risen significantly; especially of AC generators, switchgears, transmission towers and energy meters.
The IEEMA is also encouraged by the initiative of the Department of Heavy Industry (DHI), Government of India, of taking a holistic view and formulating the Indian Electrical Equipment Industry Mission Plan 2012-2022. It is keen to down a clear roadmap for enhancing the competitiveness of the domestic electrical equipment industry.
IEEMA believes that assured availability of quality power at reasonable cost will not only act as a catalyst in the socio-economic development of the nation but also enhance the global competitiveness of the domestic industry leading to greater employment generation and higher levels of per capita income.
|Growth Indices for Electrical Equipment Industry|
|Cumulative Growth Compared to same period of previous year|
|Product||Weightage||April – March 2012-13 (% Growth)|
|Overall IEEMA Electrical Equipment Growth Index||100||-7.76|