Deshmukh wants FM to slap duties on power equipment imports

Heavy Industries Ministry has asked the Finance Ministry to impose up to 14 per cent tax, including safeguard duty, on imported power equipment to protect the domestic industry mainly from Chinese influx.

"...This land (India) is being used as a dumping ground... We have requested the Finance Minister (Pranab Mukherjee) to put 10 per cent customs duty plus 4 per cent special additional duty (on imported items) so that local players could be protected...," Heavy Industries Minister Vilasrao Deshmukh told reporters here.

He said that due to surge in imports, primarily from China, domestic companies especially Bhel were being affected.

Deshmukh said the Finance Ministry has been urged to consider the demand of imposing duty in the Budget 2010-11, slated to be unveiled on February 26.

The Planning Commission has carried out a study to assess the impact of power equipment imports from China.

A Bhel official said that foreign suppliers enjoy an edge over local players as duties on imported power equipment have been made zero in the mega power policy, whereas domestic companies have to pay different taxes and duties.

Safeguard duty, a trade remedy under the WTO, is imposed to check surge in imports of an item.

In the 12th-Plan Period, of total orders of about 45,000 Mw placed so far, orders for thermal capacity of about 14,000 Mw have been placed on Chinese manufacturers and suppliers.

In the 11th Plan Period (2007-12), out of the likely thermal power capacity addition of 61,237 Mw, equipment for about 21,000 Mw is being imported from Chinese manufacturers.

Similarly, of total orders of about 15,000 Mw for hydro power projects, order for 464 Mw have been placed with Chinese manufacturers/suppliers.

Meanwhile, state-run Bharat Heavy Electricals (Bhel) today paid an interim dividend of Rs 364.66 crore for 2009-10.