Govt slaps 35% duty on electrical insulators from China

The move will help Aditya Birla Nuvo, BHEL and other domestic players battle cheap shipments

The government has imposed 35% safeguard duty on electrical insulators imported from China, a move that would help Aditya Birla Nuvo, BHEL and other domestic players battle cheap shipments.

The safeguard duty on certain insulators would be for a period of two years -- 35% for first year and 25% in subsequent year, according to the Revenue Department.

The move follows recommendations for the imposition of the duty by the Directorate General of Safeguards (Customs & Central Excise).

In the wake of complaints from domestic players against cheap Chinese imports, DGS, after a probe, said: "It will be in the public interest to impose safeguard duty on import of electrical insulators from People's Republic of China."

Aditya Birla Nuvo, Insulators and Electrical Company, Modern Insulators and WS Industries (India) had approached the DGS seeking safeguard duty to protect domestic players against market disruption caused by the increasing Chinese imports.

Other domestic majors in the electrical insulators' space include Bharat Heavy Electrical Ltd (BHEL), Saravana Global Energy, and Shreeji Power and Insulators.

The domestic industry had argued that all major Indian players have sufficient swappable capacity and can cater the country's demand right up to 1,200 KV. It said Indian producers have already supplied significant volumes of 765 kV (more than 4 million) insulators in Indian market.

Many domestic entities also export their products to more than 75 countries.

During the DGS investigation, BHEL had informed that Chinese producers are quoting predatory prices purely to increase their share of the Indian market.

As a result, according to BHEL's submission, the share of domestic producers in the orders given by state-run power transmission utility Power Grid is coming down.

Power Grid accounts for 50-70% of insulator consumption in India and now most supplies are from China.

In accordance with WTO norms, safeguards give domestic producers temporary relief while they adjust to the pricing tactics of competitive foreign players.