India allows 4 China-linked firms to bid for power projects
India has granted a two-year exemption to four China-linked power equipment manufacturers with local factories, allowing them to bid on critical government infrastructure projects. This move aims to address equipment needs for India's massive tran...
By ET Bureau |
India has allowed four China-linked power transmission equipment manufacturers with local factories to bid for government contracts involving critical power infrastructure.
The finance ministry, through an order dated June 24, granted the exemption to transmission and related equipment companies TBEA Energy India, Nanjing Electric India, New Northeast Electric India and Taikai Electric (India).
The relaxation allows them to participate in government tenders for critical power projects despite procurement curbs applicable to companies from countries sharing a land border with India. The exemption is limited to the four companies for two years and does not amount to a broader easing of the procurement rules, according to the office memorandum seen by ET.
Shares of Hitachi Energy India, Siemens Energy India, GE Vernova T&D India, Bharat Heavy Electrical, Transformers & Rectifiers India and CG Power closed between 4.6% and 8.9% lower on the BSE Friday amid investor concerns about increasing competition from these Chinese firms. The benchmark BSE Sensex ended 0.3% higher.
“Whether these companies are materially affected will depend on how many government tenders the newly exempt firms win over the next two years,” an industry executive said.
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The move follows a proposal by the power ministry, which had sought a relaxation for manufacturers with established operations in India to address equipment requirements for critical power infrastructure.
India is undertaking a large-scale expansion of its transmission network to support rising electricity demand and integrate renewable energy capacity, increasing the need for timely availability of specialised power equipment.
The procurement restrictions were introduced in 2020, requiring companies from neighbouring countries to obtain prior government approval before participating in public tenders.
One of the reasons for the delay in laying transmission infrastructure in the last 10 years is a thin global supplier base for high-voltage direct current (HVDC) components, according to industry experts.
