Patel seeks higher duty on imported power equipment

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The Heavy Industries Ministry has sought an additional levy of 5% on imported power gear to protect the struggling domestic power equipment players.

 

The latest move comes against the backdrop of local power equipment makers, including state-run Bhel, facing tough market conditions due to overall economic sluggishness and cheaper imports mainly from China.

 

Heavy Industries and Public Enterprises Minister Praful Patel has written to Finance Minister P Chidambaram seeking higher import duty on power gear, which currently attracts 21% levy.

 

"We have sought 5% additional customs duty on imported power equipment from the Finance Ministry to protect the interest of domestic industry," Patel said here today.

He was speaking to reporters on the sidelines of an event organised by the Indian Electrical and Electronics Manufacturers Association (IEEMA).

 

Patel said, "I think the government has recognised that import of power equipment is needed to be at least arrested and for that reason there has been a duty now on imports of electrical equipment.

 

"As a result of which we are seeing that all the IPPs specially the private sector ones are coming to the private ones like Bhel and L&T and others for placing their equipment orders."

 

A government official said additional duty on overseas power equipment would help the domestic industry "which is in a bad shape".

 

In July last year, the government had slapped 21% import duty on power equipment.

 

The Cabinet, last year, had approved 5% basic customs duty, 12% counter-veiling duty and 4% special additional duty on import of power gear.

 

Stressing upon the need for government intervention to protect the domestic industry, the Minister said that every country looks at its own interest.

 

"Countries like the US and China exercise control to protect the interest of their domestic industry. We also have a huge responsibility in developing our nation and should look at new ways.

 

"Some government intervention is required to protect domestic industry," he added.

 

Patel noted that domestic players like Bhel and L&T have actually added huge capacities but the slowdown in power sector resulted in an adverse impact.

 

"So, its a situation where we will have to correct tis imbalance at the earliest," he said.