Home / Business and Economy / India Grants 2-Year Power Exemption to China Firms
India Grants 2-Year Power Exemption to China Firms
4 Jul
Summary
- Four China-linked companies receive a two-year exemption.
- Exemption allows bidding on critical Indian power infrastructure.
- Domestic firms express concern over increased competition.
India has granted a two-year exemption to four China-linked power equipment manufacturers with local factories, permitting them to bid on critical government infrastructure projects. This decision, effective from June 24, allows companies like TBEA Energy India and Nanjing Electric India to participate in tenders for vital power projects.
The exemption aims to meet the growing demand for specialized power equipment needed for India's extensive transmission network expansion. This expansion is crucial for managing rising electricity consumption and integrating renewable energy sources. The relaxation is temporary, lasting two years, and does not signify a broad easing of India's procurement restrictions.
However, the move has raised concerns among domestic power equipment manufacturers. Shares of several Indian companies, including Hitachi Energy India and Bharat Heavy Electrical, experienced significant drops on the stock market following the announcement. Industry experts suggest the full impact will depend on the number of government tenders these exempt firms secure.
These procurement restrictions were initially implemented in 2020, requiring prior government approval for companies from countries sharing a land border with India. The power ministry had proposed the relaxation to ensure the timely availability of necessary equipment for crucial infrastructure development, citing a limited global supplier base for components like high-voltage direct current (HVDC) systems as a contributing factor to past project delays.
