Row over import duty on power equipment, PM action sought

Pitching for a level-playing field to the domestic power equipment manufacturers, mainly BHEL, Heavy Industries Minister Praful Patel would take up the demand for import duty with Prime Minister Manmohan Singh.

"We have involved the PMO. They are also looking at these issues very closely.... I am meeting the Prime Minister in this regard... This evening," Patel told reporters today.

With several private sector companies like Reliance Power and Adani Power going in for cheaper equipment from China, at negligible or no duty, the domestic capital goods industry including BHEL and L&T are crying foul.

The Heavy Industries Ministry has thrown its weight behind the indigenous equipment makers.

"China has put the domestic industry like BHEL and L&T at a disadvantage," Patel said.

He said, while it may not be possible to disallow imports, "Imposition of import duty would give domestic power industry a level playing field."

Patel also demanded that the procurement model for equipment for ultra mega power projects (UMPP) of 4,000 MW capacity, should involve international competitive bidding.

At present, the Indian generation firms are not subject to the ICB route for UMPPs and procure the power gears through bilateral arrangements.

This, the minister said, works against the domestic equipment makers.

While, the Power Ministry has proposed imposition of 14% import duty, the Industries Ministry wants it at 19%.

However, the move is being opposed by the power producers who feel that a growing economy like India needs energy at competitive rates and duties on equipment will make it expensive.