With domestic power producers stepping up use of Chinese equipment, we need a proactive policy to guard the public interest. Now, on the face of it, rising imports of China-made boilers, turbines and the like for power plants in India seem unexceptionable. Chinese equipment cost less, are readily available and so appear to fit the bill for revving up power generation capacity here.
However, there are genuine public policy issues that need to be addressed. For one, there’s the issue of unfair trade practices. It may well be that the seemingly cheap Chinese exports are being routinely subsidised. Worse, the exports may not be legally valid. For instance, the export of ‘super-critical’ boilers by Chinese licensees is reportedly not allowed. There may be technical reasons for going slow on sourcing Chinese equipment too. For example, the thermal boilers may not be designed for Indian coal and attendant specifications. Also, prompt after-sales and maintenance locally may not be possible, sans a manufacturing presence.
The way ahead is to mandate an offset policy for Chinese power equipment imports. Power is a critical industry and large economies do require local manufacture and value-addition for equipment. Besides, the Indian power equipment industry is large and growing, which is reason enough for Chinese equipment makers to enthusiastically invest in manufacturing facilities here. Already, reports say that Harbin Power Equipment Co is to have a domestic production base to meet demand.
Meanwhile, with L&T, our biggest engineering and construction company, foraying in a big way into power equipment production — it has joined hands with Mitsubishi for energy efficient super-critical boilers — the domestic industry seems to have considerably matured. Bhel, our main power equipment maker, already has a tie-up with Alstom for super-critical boiler technology. Further, ABB India is also boosting its manufacturing presence. There is no reason why Chinese producers ought to shy away from following suit.
Source : The Economic Times