Saturday, October 26, 2013

Rashid win the BILT Open 2013

Greater Noida, October 26, 2013: Delhi Rashid Khan defeated rookie Angad Cheema of Panchkula in a playoff to win the BILT Open 2013 at the Jaypee Greens Golf Resort in Greater Noida. Rashid and Angad headed for the playoff after ending the regulation 72 holes with identical totals of 16-under-272. Rashid finally prevailed on the second playoff hole.

Rashid Khan (64-68-69-71), the overnight leader by one stroke, had an eventful start to the day as he made birdie-bogey-birdie on the second, third and fourth holes. RashidⳊthree-putt on the third was followed by a fabulous up and down from 120 yards on the fourth. Khan, the wire-to-wire leader from round one till the end, sank birdie putts from 10 to 15 feet on the 11th and 13th to maintain a slender one shot lead over nearest competitor SSP Chowrasia.

Electrical Equipment Industry Reaction to Government Move to Allow Chinese Power Firms

Electrical Equipment Industry Reaction to Government Move to Allow Chinese Power Firms to Set-up Service Centres In India

The Indian electrical equipment industry, over INR 1.30 lakh crores (USD 24 billion) in 2012-13, comprises of two segments – generation equipment (boilers, turbines, generators) and transmission & distribution (T&D) and allied equipment like transformers, cables, rotating machines, transmission lines, switchgears, capacitors, energy meters, instrument transformers, surge arrestors, stamping and lamination, insulators, insulating material, industrial electronics, indicating instruments, winding wires, etc.
The generation equipment sector is 28% of the total industry, while the T&D equipment sector is the rest 72%.  The industry is 10.23% of the manufacturing sector is terms of value and 1.38% of the GDP. It also provides direct and indirect employment to 1.5 million people and over 5 million across the entire value chain. The industry exported USD 4.9 billion worth of electrical equipment in 2012-13.
Based on the projections of the government for capacity enhancement in power generation, transmission and distribution in the 10th, 11th and 12th Plans, the domestic electrical equipment manufacturing industry has made huge investments in doubling and, in some cases, even tripling its production capacity.
However, this built-up capacity currently stands under-utilised across several products due to sluggish domestic demand on account of the slowdown in the power sector and a surge in imports of electrical equipment in recent years. This is significantly impacting the commercial viability of the domestic electrical equipment industry and impacting both the top-line and bottom-lines of the manufacturers. This can have severe long term consequences.
After growing at 11.3% and 13.7% in 2009-10 and 2010-11 respectively, growth rate of the T&D equipment sector decelerated to 6.9% in 2011-12. For the first time in 10 years, the T&D equipment sector witnessed a negative growth of 7.8% in 2012-13. In the last couple of years, there has been hardly any growth in capital expenditure in the T&D equipment sector. T&D equipment manufacturers are broadly working at less than 70% of their production capacity.
In the last few years, the domestic manufacturing capacity of generation equipment has being ramped up and currently stands at 25,000 MW per annum against a requirement of about 16-17,000 per annum. With 6-7 joint ventures coming up in India, the capacity will increase to 40,000 MW per annum by 2014-15.
Our inability to meet targets for generation capacity addition is adversely impacting the downstream transmission and distribution sectors.
Disproportionate reliance on imported power equipment, with uncertain quality and lifecycle, and with no domestic manufacturing facility to provide emergency repairs, spares, replacements, etc. especially for heavy equipment, is fraught with long term risks. With integration of automation and communication technology into the T&D network, there is also a possibility of a major security concern.
During the last seven years, 2005-06 to 2012-13, India’s imports of electrical equipment have increased at a compound annual growth rate (CAGR) of 24.67% in rupee terms and were at INR 64,674 crores (USD 11.9 billion) in 2012-13.
China’s share in Indian imports of electrical equipment has dramatically increased in the last few years and now it stands at 44.92% (2012-13) of the total from 15.26% in 2005-06. Imports from China have grown at a CAGR of 45.46% in the last seven years and were INR 29,054 crores (USD 5.3 billion) in 2012-13.
Imports of electrical equipment in the country have assumed very threatening proportions and have now captured 38.26% of the market for electrical equipment in India, whereas there is significant underutilisation of installed domestic capacity, resulting in loss of employment of qualified engineers, technicians, workers, etc.
Domestic electrical equipment manufacturing industry suffers a significant disadvantage vis-à-vis imports due to sales tax / VAT, entry tax / octroi; higher financing cost; lack of quality infrastructure; dependence on foreign sources for critical raw material and components, etc.
In addition, Chinese manufacturers of electrical equipment are given by their Government export subsidies as high as 17% of the export value, social security subsidies, lower income tax rate (15%) and access to financing at low rates of interest, which gives Chinese companies over 24% unfair pricing advantage and allows them to price their products very competitively. Further, China is also offering credit to foreign buyers on very soft terms to finance their imports. As a result, imports from China are escalating every year. All this makes Indian industry non-competitive in its own country.
Import duties on electrical equipment are quite low and are further being lowered under the different free trade agreements (FTAs) signed or being signed. The interests of the domestic electrical equipment industry are not being safeguarded under different FTAs being signed.
In the last one year, the Government of India has taken some steps, viz.
Ø  With effect from 19th July 2012, the Government of India, vide notification no. 49/2012-Customs dated 10th September 2012, imposed import duties at the rate of 5% basic customs duty, 12% countervailing duty and 4% special additional duty, along with cess as applicable, on import of equipment for ultra-mega power plants (UMPPs) / mega power plants (MPPs).
Ø  On the finding of the Director General (Safeguard) that the increased import of insulators from China have caused and threatened to cause market disruption to the domestic industry and producers of electrical insulators, the Government of India, vide notification no. 5/2012-Customs (SG) dated 20th December 2012, has imposed a safeguard duty of 35% in the first year and 25% in the second year on imports of electrical insulators from China.
But, these measures are not enough, and the Government of India needs to provide greater encouragement to indigenous manufacturing.
To stimulate demand for the domestic electrical equipment industry, the government should expeditiously address the challenges confronting the country’s power sector, including the problems in fuel linkages, land acquisition, environmental and other clearances, precarious financial health of utilities, etc. The power sector needs the highest priority attention of the government.
The Government of India needs to provide greater encouragement to indigenous manufacturing as done by several countries, including China, by initiating time-bound action on the following:
1.      Limiting participation in tenders for bidding for domestically funded projects to domestic manufacturers only;
2.      Putting in place a requirement of setting up a manufacturing facility in India, within a specified timeframe of the award of the tender, where foreign bidding is allowed, to provide for level playing field bidding, that is, phased manufacturing process (PMP) should be made mandatory in the country for supply of major equipment;
3.      Mandating testing in only Indian laboratories, like CPRI under the Ministry of Power, for foreign suppliers of electrical equipment, wherever test certificate is a prerequisite;
4.      Stipulating a minimum percentage of the total procurement by any utility to be of ‘Made in India’ products;
5.      Stipulating some amount of price preference for Indian products in procurement by utilities;
6.      Raising the basic customs duty (BCD) on all electrical equipment products to a uniform 10% (currently, BCD on T&D equipment is generally 7.5% and on generation equipment, including project imports, is generally 5%);
7.      Framing model procurement guidelines for utilities;
8.      Ushering in standardisation of product specifications and design parameters;
9.      Safeguarding the domestic industry’s interests under different free trade agreements (FTAs) by including electrical equipment (at least in those which have significant underutilisation of production capacity) in India’s negative list or with sufficiently long period for duty reduction. With countries having a strong base in manufacture of electrical equipment, India’s endeavour should be to include electrical equipment in India’s negative list or with sufficiently long period for duty reduction. Similarly, with countries not having a strong base in manufacture and export of electrical equipment, endeavour should be to include electrical equipment in the other country’s schedule of tariff concessions, with the shortest possible period for duty reduction.
The above measures will support Indian manufacturers, who are not seeking protection but a level playing field, and provide necessary safeguards to the domestic industry that is facing non-market competition on account of cutthroat below-cost entry level prices offered by Chinese manufacturers.

IEEMA is a 65 year old Industry Association representing the Indian electrical, industrial electronics and allied equipment industry. IEEMA has over 800members with a combined annual turnover over $25 billion. IEEMA is consulted for policy formulation as the industry-government interface, and evolves product standards alongside India’s standards setting body the BIS.
Its membership base, ranging from public sector enterprises, multinational companies to small, medium and large companies, gives IEEMA a truly national representative character. IEEMA members have contributed to more than 90% of the power equipment installed in India. The industry exported $4.9 billion worth of electrical equipment in 2012-13.
IEEMA publishes statistics pertaining to trade and growth, export promotion, raw material price indices etc. IEEMA facilitates industry – user interactions through international technical conferences, roundtables and training/tutorials sessions, and the monthly publication IEEMA Journal.
IEEMA organises, its flagship event ELECRAMA, every two years in India, which is the largest focused exhibition in the world of electrical transmission and distribution equipment industry and showcases India’s manufacturing capability and strengths to the global community.
Rajeev Ketkar
Dy. Director – PR & Membership Cell | | +919769802610
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