The government in October launched a massive green push to replace 750 million tungsten bulbs with energy-efficient LED ones. But it is the Chinese companies, and not the local manufacturers, who are set to scoop up a bulk of the potential Rs 24,000-crore worth of orders as domestic companies don't have the wherewithal to meet this demand.
Moreover, as the LED (light emitting diode) technology has low wear and tear, say Indian companies, this would mean that the market would be sewn up for about two years.
Industry sources claim that the order size could eventually swell to as many as 2 billion bulbs. At an average Rs 120 per LED, the business could potentially tot up to about Rs 24,000 crore.
Said Praveen Khandelwal, the national general secretary of the Confederation of All India Traders (CAIT), an industry lobby group representing medium and small local manufacturers: "This goes against the Prime Minister's 'Make in India' initiative."
He said even the bigger players did not have the requisite installed manufacturing capacity, and are directly importing the bulbs from China. "This disrupts the entire value chain for small players," he claimed, adding that local manufacturers need about six months to ramp up production capacities.
The government conceded there may be a problem, but says it would be wrong to differentiate between big and small companies.
"We are concerned that the largest value items are not made in India," said Ajay Mathur, director general of the Bureau of Energy Efficiency. "We are looking at doing the packaging of the light source within the country in the next two years," he said.
However, the tendering process does not discriminate among players, and is open to all, he added.
"Even retailers are getting impacted. It is not the government's business to distribute these items at people's homes," said a senior official with one of the bigger companies who did not wish to be identified.