Termination of Chinese contracts in Railways and Telecom are welcome steps by the government. Next step should be in Power. The Indian electrical equipment industry has the capacity, ability and cost competitiveness to effectively service and meet the need of not only Indian industry but also enhance its exports.
For the last 6-7 years,Indian industry has been sitting on 30 to 40 percent of over capacity. Export of Indian electrical equipment has grown not only in developing countries but also in developed world. The top five exporting destination from India are USA, Nigeria, Bangladesh, Germany and UAE.
The industry has also shown leadership in innovation particularly when challenged. Case in point is the 1200 KV transmission line in Bina, Madhya Pradesh.
There is a high import from China and two reason for this high import of electrical equipment from China. Firstly Chinese offering very low prices and exploiting the public procurement system which is based on L1 and in the process giving low quality material . Secondly Indian businesses finding these low prices an easy options. Chinese are able to offer inordinately low prices because in China the State continues to be a major economic player. The hand of the State is directly or indirectly present in every enterprise. Pricing is strategic in nature and may not be driven by market consideration alone, more often these consideration are long term goals of the Party which has no opposition and no room for dissent .
Given the fact that India has a long standing border dispute at multiple points and China indulges in posturing every six months at the border, is reason enough for Indian industry to think seriously about minimising our dependency of raw materials and intermediates from China. The People’s Republic of China today sits atop a pile of capital and is definitely a financial, economic and military power.
The asymmetry between the two nations economically and militarily is obvious and with the given situation if they refuse to export materials to us or disruption is caused by a conflict the electrical equipment industry may have to find alternative and the sooner they do the better it is. The alternatives may be a bit expensive but safer and more reliable.
The initiatives of Government of India in terms of Make in India and Atma Nirbhar Bharat are commendable and very welcome. Industry has to respond to the clarion call given by the Prime Minister to shun the easy options and to accept the challenge.
The solutions will not be easy and will not happen overnight. The solution will only emerge with the commitment and resolve of the Indian industry.
Indian electrical industry in the past has demonstrated entrepreneurship, innovation, brilliance in manufacturing and will accept the present challenge with resolve and commitment.
( The writer is the Director General of Indian Electrical and Electronics Manufacturers’ Association)
Note : The views expressed are personal.