India’s Power Ministry Endorses Tripling Duty on China Equipment

[Pakchina]

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From Bloomberg-By Kartikay Mehrotra

"India’s power ministry endorsed a plan to almost triple import duty on generation equipment to help local manufacturers Bharat Heavy Electricals Ltd. (BHEL) and Larsen & Toubro Ltd. (LT) compete for orders with Chinese rivals.

A proposal for increasing import duties to 14 percent for all electricity generation equipment will likely be submitted to India’s cabinet in January, Power Secretary P. Uma Shankar said today by telephone from New Delhi. The power ministry opposed a similar recommendation last year to avoid levying the duty on near-term orders, Shankar said.

Chinese suppliers won 34 percent of new equipment orders for additional capacity that’s planned in Asia’s second-fastest growing major economy in the five years ending March 31, according to the Ministry of Power. The additional duty may help ease India’s budget deficit, which reached $59 billion in the seven months to October, or 74.4 percent of the current financial year target.

“This could be a money-maker for the government, that’s one reason why it may change its mind this time around,” Bhargav Buddhadev, vice president at Ambit Capital Pvt., said by telephone. “For Bharat Heavy, this is nothing but a sentimental positive. This doesn’t change our outlook for the company as it won’t deter Chinese companies from competing.”

Orders were placed with Chinese companies for equipment for 21,100 megawatts of the 61,237 megawatts of capacity expected to be added in the five years ending March, junior power minister K.C. Venugopal told parliament in New Delhi on Dec. 9.

No Special Protection
A panel headed by Planning Commission member Arun Maira recommended in 2010 the levy of 14 percent in import duties to “bridge the disadvantage” faced by local manufacturers against overseas rivals, especially from China.

Bharat Heavy is asking for a level playing field and is not seeking any special protection, Chairman B. Prasad Rao said on Nov. 3 after India’s power equipment makers met Heavy Industries Minister Praful Patel seeking the 14 percent import duty.

India currently imposes 5 percent customs duty on the import of equipment orders for projects generating less than 1,000 megawatts.

Bharat Heavy faces competition from Chinese equipment makers such as Shanghai Electric Group Co. (601727) and Dongfang Electric Corp Ltd. (600875), which want to tap into Prime Minister Manmohan Singh’s $1 trillion infrastructure investment plan, including $400 billion for power.

“Even though India has the right to impose a duty, we think power companies will continue to cooperate,” Wang Xufeng, minister at the Embassy of China in India, said in an interview on Dec. 9. “Of course, this will become a business decision for them.”


India

[Splurgenxs]

Well anti dumping polices have been a hit round the globe.
About time.

Mostly with Chinese goods

[xataxsata]

Govt. is killing domestic manufacturing, they have allowed 100% duty free import of turbines from china and no other tax is levied on them.

On the other hand a domestic manufacturer who manufacturer in India have to pay several taxes.

Its not fare for Indians till date, now i hope govt. fix this thing forever not only for power plants but for other things too.

[IndoCarib]

Looks like India is learning a lesson on protectionism from China

On a serious note, Chinese power plants are fined elsewhere

China Power Plants Fined For Pollution Violations

[perplexed]

China imposes heavy fine on companies doing business in their country... about time we do the same with chinese companies

[Abhishek_]

glad GOI is developing a spine.

[Archie]

well if it helps reduce trade deficit then i am all for it

[harpoon]

Desperate times need desperate measures.

[HongWu]

Three cheers for higher prices for india! I hope you're ready to go "hyper".

[Abingdonboy]

Good move. Dumping is a morally redundant tactic the Chinese have used throughout the world and now the world is fighting back. Such moves are much needed. 2013- will see all hell break lose between EU-China as a ban on trade disputes between EU members angry against Chinese ruthless tactics will run out and THEN we really will see the brown stuff hit the spinning thing.

[somebozo]

He forgot that China is also financing Indian power sector at low intrests rates of 5% and this is not a way to play nice to cover up your own incompetencies and bogus economic growth

[Abhishek_]

I'd happily pay the higher price if it employs our own, rather than screw turning buf00ns like HongWu.

Besides, GOI should provide a level playing field since the chinese companies get major subsidies, it's only natural that GOI should employ customs duty to bring the prices to a normal level.

The US govt here has taken similar steps as well.

[Chinese-Dragon]

First the flip-flop on retail FDI, and now this? Protectionism is going full-swing in India nowadays.

But hey... if you can't compete on efficiency, then what else can you do apart from increasing protectionism.

[Abhishek_]

First the flip-flop on retail FDI, and now this? Protectionism is going full-swing in India nowadays.

But hey... if you can't compete on efficiency, then what else can you do apart from increasing protectionism.

chinese talking about protectionism...

[Kinetic]

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First the flip-flop on retail FDI, and now this? Protectionism is going full-swing in India nowadays.

But hey... if you can't compete on efficiency, then what else can you do apart from increasing protectionism.

Efficiency!! Do you even know what is called efficiency? Protectionism!!

This is not protectionism but saving the country from low quality products with anti-dumping policies.