Zero duty on im­ported power gen­er­a­tion equip­ment goes

MOVE TO BOOST DO­MES­TIC MAN­U­FAC­TUR­ERS

Resource Digest - - CONTENT -

The Cen­tre has dis­al­lowed im­port of cap­i­tal goods for power gen­er­a­tion and trans­mis­sion projects un­der the Ex­port Pro­mo­tion Cap­i­tal Goods (EPCG) scheme, in a move that may dis­cour­age im­ports from China and boost do­mes­tic man­u­fac­tur­ing.

An of­fi­cial no­ti­fi­ca­tion amend­ing the For­eign Trade Pol­icy 2015-20 was is­sued by the Di­rec­torate Gen­eral of For­eign Trade (DGFT) stat­ing that au­tho­ri­sa­tion un­der the EPCG scheme shall not be is­sued for im­port of any cap­i­tal goods for gen­er­a­tion/ trans­mis­sion of power. The EPCG scheme al­lows im­port of cap­i­tal goods at zero cus­toms duty for pre-pro­duc­tion, pro­duc­tion and post-pro­duc­tion sub­ject to the spec­i­fied ex­port obli­ga­tion.

“This de­vel­op­ment will make it more dif­fi­cult for Chi­nese man­u­fac­tur­ers to par­tic­i­pate in the In­dian ther­mal power sec­tor. The share of Chi­nese equip­ment in In­dian power plants has been any­way com­ing down be­cause In­dian com­peti­tors of­fered bet­ter qual­ity prod­ucts and bet­ter ser­vices,” a power in­dus­try of­fi­cial said.

Im­porters of cap­i­tal goods for the power sec­tor will now have to pay an im­port duty of 5 per cent.

Be­tween 2011-12 and 2015-16, of a tar­geted 76,334 MW ther­mal power ca­pac­ity ad­di­tion, as much as 37,904 MW (or about 50 per cent) was to come from Chi­nese sup­pli­ers. How­ever, most of th­ese were for projects com­ing up be­tween 2011-12 and 2013-14.

The Cen­tre has fixed a ca­pac­ity ad­di­tion tar­get of 88,537 MW of power gen­er­a­tion for the 12th Plan pe­riod end­ing 2016-17. As of De­cem­ber 2015, 72,240.12 MW or 81.59 per cent of the tar­get had been achieved, ac­cord­ing to the Cen­tral Elec­tric­ity Au­thor­ity.

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