Why Chinese imports are lucrative for Indian companies

Powering Up
When the Adani Group wanted to instal power gear for a 4,620-MW plant in Mundra, Gujarat, it opted for an assortment of Chinese vendors — Shandong Electric, Harbin Electric, Dongfang Electric and Beijing Beizhong. Domestic players, it seems, didn’t stand a chance. According to company executives, Chinese products were half the price of those proffered by local makers such as state-run Bhel and they also had much larger manufacturing capacity to boot.

Bhel has been under fire from aggressive Chinese firms queueing up to compete for power plant deals even if they face trade barriers like import duties.

Government officials have also recently claimed that Chinese gear is less efficient than Indian products — but companies in a rush to set up plants and on a tight budget may not be willing to listen.

A New Weave

Imported Chinese weaving machines are 30-50% cheaper than their domestic rivals and more readily available, making them a favourite with textile companies across the country.

The value of imported Chinese gear increased from Rs 1,636 crore in 2006-07 to Rs 4,300 crore in 2012-13, according to estimates from Textile Machinery Manufacturers Association. S Chakroborty, president of the association, says a few smaller players have buckled and gone under in India, even as others try to retool themselves to produce higher quality products. “There is little room for manoeuvre since input costs for components such as iron are higher for Indian companies,” he says.