Highlights of Special Session with Ms. Sumita Dawra, Additional Secretary, DPIIT
Mr Vipul Ray – President IEEMA
- The Indian electrical industry, represented by IEEMA, has a combined turnover of USD 50 billion. A prominent size and space is occupied by the Electrical Equipment and Machinery in the Capital Goods Sector, which is approx. 55 percent of the entire Capital Goods Sector. More than 90% of the installed electrical equipment in the country have been contributed by IEEMA members. The industry exported over USD 8 billion worth of electrical equipment to the world.
- Over the years, the Indian electrical equipment industry has developed a diversified, mature and strong manufacturing base, with robust supply chain, and a rugged performance design of products. There is also an emerging global reputation of Indian electrical equipment for sourcing of base products and components.
- Technology is changing very fast. Equipment and equipment manufacturing technology is witnessing significant modernisation which is being adopted in the manufacturing processes. Technological advancements, like smart meters, smart grids, alternate to SF6 gas, RIP bushings are integral part of the industry’s contribution to the nation. Indian manufacturers also need to focus on product innovation, technology, R&D, packaging, cost competitiveness. The manufacturers need to keep pace with the technological advancements and innovations.
- Our Hon’ble Prime Minister gave a clarion call to become Aatmanirbharand import substitution. The electrical industry sees it as one of the biggest opportunity.
- The Orders of the Ministry of Power and the Department of Expenditure, restricting imports from prior-reference countries sharing land borders are already in place, which is a positive and welcome step. This will have far reaching impact in import substitution and boosting self-sufficiency. Pragmatic and effective implementation of same is required.
- IEEMA keen to meet DPIIT on a more regular basis in order to partner the policy makers in removing the bottlenecks, and looking forward to a successful implementation of Aatmanirbhar Bharat and Manufacturing Hub.
- IEEMA has been working closely with the Govt. IEEMA had been one of the partners with the Government of India and the State Governments of Odisha and Assam in restoring the power network, after natural disasters like cyclone and flood hit in these States.
- Electrical Vehicle, Renewable Energy and Cyber Security of power network.
- Public procurement procedures
- International Business – Export competence and market access
- Safety – long lasting safety measures and critical testing and approvals
- President requested the Additional Secretary for a more frequent interaction with DPIIT, either monthly or bi-weekly.
Mr Vijay Karia, Chairman, Digielec Bharat
- Electrical sector is the fulcrum of industry.
- Safety of electrical equipment is primaryas there are reported deaths of 25,000 per annum, which translates into 63 deaths per day. IEEMA and its members are taking many initiatives around Fire safety of electrical equipment.
- Most of the power utilities in central and states are Government owned. Non-payment and cash flow from these utilities impact the credit worthiness of the industry with the banks and lending institutions. For ease of finance for the supply industry, the 90 day credit period, after which it gets converts into an NPA, need to be extended to 180 days, at least in the cases where payments are delayed by the Government owned utilities.
- Major thrust has been given to exports by Hon’ble Minister for Commerce & Industry. Electricity sector being a sunrise sector in several developing markets there is tremendous growth potential for this sector. IEEMA has set a target of USD 25 billion export target in next 5-7 years.
- The industry is confident to meet the export target, however, there is a need for simplification of certain export rules and procedures, which are causing impediments towards this goal.
- In 2017-18, India’s electrical equipment exports, including power project exports, were only INR 41,677 crore (around USD 6.21 billion). While India’s electrical equipment imports during the same period was at INR 55,608 crore (around USD 8.29 billion). There is a deficit in trade of India’s electrical industry.
- With the electricity sector being a sunrise sector across the entire developing world, there exists significant potential for India to tap the export markets. India should target a 5% share of global trade in electrical equipment in the next ten years so that our exports reach a level of USD 25 billion.
- Since there is hardly any growth in power sector, the domestic equipment manufacturers have about 50% idle production capacities. Therefore, efforts have to be augmented to increase exports of electrical equipment and restrict the rapid growth in imports
- In 2017-18, the top 10 countries where exports of Indian electrical equipment took place (value wise from largest to smallest) were USA, United Kingdom, United Arab Emirates, China, Germany, Bangladesh, France, Singapore, Vietnam and Saudi Arabia, which testifies to the quality of electrical equipment manufactured in India.
- The performance bank guarantee reduction to 3% to be evenly considered across the Country and all central government policies to be supported by the States.
- DPIIT Circular of 23rd September on extending exports licencing from 31 December 2021, to be extended to 31 March 2022. And the 5% export obligation to be removed for regular exporters.
- It is recommended to simply the quantity and value based advance license to just value based advance license and increase validity of license from 18 months to 36 months because of the lockdown issues.
- Regarding pre and post export credit, the Reserve Bank of India had extended the period. However, the banks are still charging abnormally high rate of interest, which is 16% to 18% per annum.
- Goods from India as Country of Origin, covered under lines of credit to be increased to 85% from 75% to support Indian Manufacturers.
Mrs Sumita Dawra, Additional Secretary, DPIIT
- All industry issuesto be represented by IEEMA to DPIIT in one-hour meeting slot to be taken up with concerned Ministries.
- The industry turnover of USD 50 billion, contribution to GDP top exports commendable. The growth rate of the industry earlier has been in double digits. Showing a potential for the industry to grow further more.
- New Product and market Access to be enhanced, support from the Indian Missions to be explored.
- New technologies and new innovations for Industry being showcased at Digielec, an opportunity to be on the Global supply chain for the Industry is impressive.
- Export target of USD 25 billion, new opportunities in EV storage, carbon net, green hydrogen is appreciable.
- Prime Minister’s Clarion call of vocal for local,where industry and Government to work together to make the country as manufacturing powerhouse.
- The country jumped to 63rd position in Ease of Doing Business.
- Reforms in public procurement and PLI scheme, and all issues related to market access, credit related issues, quality and safety, strategy for product and market diversification. IEEMA and DPIIT to work in collaboration.
- DPIIT can facilitate in Buyer-Seller Meet abroad.
- A team from Invest India and DPIIT to work closely with DG, IEEMA to work on strategy for market access, product access, diversifications for short and long term goals.
- Additional Secretary also invited IEEMA for a one hour meeting to discuss various issues pertaining to the Electrical industry.
Mr Hamza Arsiwala, Vice President, IEEMA
- Thanked all the dignitaries on the dias
- Thanked Additional Secretary for all the support extended and recognition of the electrical segment as an important segment of the industry.
- Industry aligned with Hon’ble Prime Minister’s vision of exports.
- L1 approach of procurement is detrimental for growth and innovations of the industry, while Reverse Auction tends to be more emotional instead of being based on logical perspective.
- IEEMA is Committed to working closely with DPIIT and government on all the policy advocacy.