Indian Electrical & Electronics Manufacturers ' Association has warned that the existing 'inverted import duty structure' would harm the industry unless the anomalies in the duty structure were reversed.
Under the existing duty structure, raw materials like copper, electrical steel and insulating materials required in the manufacture of finished electrical goods were attracting higher rate of import duties as compared to finished goods.
"This has an effect of making finished imported goods more attractive," R N Mukhija, president of IEEMA, cautioned.
However, the duty structure appears to have had little impact on the sector's workings in the past few months. The has reported more than 8 per cent growth in the first quarter of 2003-04 as compared to Q1 of 2002-03.
The major contributors to the growth were rotating machines, cables and transformers, Mukhija said. HT motors and power cables registered quantum jump. Growth in LT motors was also strong.
Distribution transformers sold strongly owing to government initiatives under APDRP under which the rural power transmission and distribution network was being revamped.
Though power transformers showed negative growth of 11 per cent, the order book data available with IEEMA indicated much better growth rate for this sector in the coming months, said the president.
Sales of energy meters witnessed tremendous growth during 2000-01 thanks to large scale procurement by the utilities.
Sale of meters had subsequently tapered off and was now showing negative growth since procurement programmes of many utilities have slowed down.
Capacitor sales also witnessed negative growth in this growing market. Capacitors were important from the point of view of efficiency improvement but not so important from the point of view of operational necessities.
Mukhija lamented that cash-strapped state electricity boards appeared to have accorded last priority to this product.
Demand for transmission line towers continued to show around 10 per cent growth. Last year, conductors had enjoyed substantial growth in sales because of increased export.
Further analysis of the data available with IEEMA indicated that the growth in the current quarter was mainly on account of growth in the domestic market. This was in turn the result of ministry of power initiatives under APDRP.
Mukhija said IEEMA was closely working with the ministry of power as a part of the special task force formed by the ministry to expedite implementation of projects funded under APDRP.
The task force comprised members from APDRP consultants such as PGCIL, NTPC, utilities, representatives from MOP and chairman of projects, transformers, energy meters and capacitors divisions of IEEMA.
IEEMA was entrusted with the responsibility to prepare an approach paper on execution of APDRP projects and also give recommendations on standard specifications for three products categories -- distribution transformers, energy meters and capacitors.
IEEMA was also working with Bureau of Energy Efficiency formed under the Electricity Act. One BEE initiative was "standards and labelling programme" for products where potential of energy savings was substantial.
Some products have been identified as priority products, which included consumer durables like refrigerators, air-conditioners and water heaters. Also included in the list were industrial products like motors, pumps, distribution transformers and lighting products.
IEEMA had organised participation in international exhibitions and interaction with international buyers through overseas missions abroad to obtain information about export opportunities.
"This effort has resulted in trebling of exports from Rs 1,500 crore (Rs 15 billion) to almost Rs 4,500 crore (Rs 45 billion) in last three years," Mukhija claimed.
A delegation of IEEMA would visit China to explore possibilities of doing business.
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