Cabinet to decide on duty on power equipment from China

The Union Cabinet is expected to take a call on the issue of imposition of duty on import of power equipment, especially heavy equipment, from China which is hurting the domestic industry badly and putting them at a disadvantage due to cheap imports.

According to the Chairman and Managing Director of Bharat Heavy Electricals Limited (BHEL), B. P. Rao, the matter is likely to be taken up by the Cabinet shortly.

Addressing a Round Table on “Equipment and service issues” organised by the India Energy Forum (IEF) here on Friday, Mr. Rao said the Planning Commission had already recommended to the government that Chinese imports of power equipment to India should be subjected to tougher import regime.

However, for some strange reason, the Power Ministry has strongly opposed the imposition of duty as recommended by the Committee of Secretaries (CoS). It has argued that such a decision could hamper its already derailed programme of capacity addition and achieving the 62,000 MW addition of power capacity during the XI Plan. Mr. Rao said that it was important that such a duty, as also recommended by the Heavy Industries Ministry, be imposed on import of heavy power equipment from China as the Chinese Government was heavily subsidising its power manufacturing industry facilitating higher export proceeds. On the other hand, India hardly had any such regime in place. He said not only the Planning Commission had moved a detailed note to the Finance Ministry which had already been notified in September but some other government departments were also of the view that imports of power equipment from China needed to be regulated.

Mr. Rao said the matter was now in the domain of the Finance Ministry and it was expected that some decision would be taken soon to protect the interests of the domestic industry and prevent the Chinese companies from capturing the Indian market through cheap imports. Earlier, the CoS had proposed to impose 5 per cent customs duty, 10 per cent CVD (countervailing duty) and 4 per cent SAD (special additional duty) on imported power equipment to provide a level-playing filed to the domestic industry and give a boost to domestic production of power equipment.