Foreign power firms unlikely to face complete ban in India

A planning commission committee charged with shaping policy on dealings with foreign investors in the power sector has decided that its proposal will likely not cut off foreign suppliers entirely. Instead, the recommendation slated for submission in September by member Arun Maira may limit itself to asking foreign manufacturers to invest in Indian facilities before continuing to import parts from abroad.

The policy would be an effort to widen the domestic technology and production base, both qualitatively and quantitatively, while trying to fill the country's existing 12 per cent power gap by using foreign products and practices. “We have no intention of banning anyone, we just want to ensure a level-playing field while allowing Indian companies to remain competitive,” Planning Member Arun Maira told . Maira also chaired a committee which issued a recommendation in 2009 to impose a 10 per cent import on power equipment, also aimed at leveling the playing field for power producers like BHEL and Larsen and Toubro. Neither BHEL nor L&T officials were available for immediate comment, however chairmen of both companies, BP Rao and AM Naik have been outspoken in their opposition to allowing Chinese investments in the India power sector. Power ministry officials are aware that closing off the industry to companies who refuse to tie-up with or establish manufacturing in India would be deemed as protectionist by the international community. Although the ministry and industry is concerned by the influx of Chinese equipment entering the country – almost 33,000 mega watts of thermal and hydro power from 2007-2017 - the government “must stop short of imposing a wholesale ban” on those who are not helping Indian power companies, said a government official under a condition of anonymity. “We can’t take it that far, realistically we cannot afford to take it that far,” he said.