Foreign power equipment companies may soon have to set shop in India, if they intend to sell their wares to power projects in the country, a senior government official said on Wednesday.
The government is likely to unveil a policy making it mandatory for foreign power equipment manufacturing firms to set up facilities in India for them to be eligible to sell power equipment in India.
The policy is expected to be announced by this month-end.
The proposed policy, awaiting approval from the Prime Minister office, will help Indian power equipment makers a larger market share.
A lot of equipment manufacturers, especially from China with comparatively low cost equipment are making inroads in the Indian power sector in a big way.
“Domestic manufacturing facility is going to be the yard stick for power equipment maker. If they open manufacturing facilities they will be able to sell their equipment in the local market,” the official said.
However, according to the official those Ultra Mega Power Projects (UMPPs) those have already ordered equipment from foreign firms and are expecting deliveries in the next four to five years will be able to go ahead with the orders already placed.
The government has set a total capacity addition target of nearly 79,000 megawatts in the ongoing 11th Five-year plan and intends to add about 11,000 MW in 2008-09.
“We will need state-of-the art power equipment in the next 8-10 years. We will also ramp up the manufacturing capacity of BHEL 15,000 MW to meet the ever increasing demand in the power sector,” the official said.
BHEL’s manufacturing capacity will be upped to 15,000 MW per annum by end of 2009 from 10,000 MW per annum now.
BHEL already is has its hands full and has orders worth Rs 50,265 crores to execute.
Power projects in the private sector have ordered equipment for 20,000 MW from China and are likely to be supplied by 2020, the official added.