Electrical equipment ind growth drops to 6.6% in FY12:IEEMA

The domestic electrical equipment industry reported a 6.6% growth in FY12, as compared to 13.7% in 2010-11 on the back of sluggish growth in power sector and escalating imports, says a survey by IEEMA. According to Indian Electrical and Electronics Manufacturers Association (IEEMA), sluggish growth in power sector and escalating imports of electrical equipment is impacting the commercial viability of domestic electrical equipment industry and will have severe long term consequences.

The growth in the equipment industry in FY12 decelerated to 6.6% as compared to 13.7% and 11.3% in FY11 and FY10, respectively. "Absence of a level playing field for the domestic industry to compete with imported electrical equipments, especially from China, is a clear and present threat," IEEMA president Ramesh Chandak said in a statement. Imports of electrical equipment have grown in the past five years at a CAGR of 28.28%. Current trends indicate that imports continue to rise for 765 kV transformers and reactors, insulators, low voltage switchgear and high voltage cables, he said. Total imports of 765 kV transformers and reactors in 2011-12 were Rs 1,229 crores. In the Q4 FY12, its imports sharply increased by 125% or Rs 687 crores over the combined total of the first three quarters of Rs 542 crores for the fiscal. "Growth in the capacitor, switchgear and transmission line sectors in FY12 turned negative, implying distinct slowdown in industrial capex activities and slowdown in off-take by users due to credit squeeze and high interest costs. The cable industry is the only sector that has shown a double digit growth of 25.7% in the year," Chandak said.