NEW DELHI: India's cabinet on Thursday approved a proposal to impose 21 percent in duties on power equipment imported for large electricity generation projects, a minister told reporters, in a move to curtail an influx of foreign gear.
Indian makers of power generating, facing heavy competition from imported equipment, mainly from China, have been pushing for the new duties.
India now charges customs duty of 5 percent on gear imported for power projects under 1,000 megawatts capacity and imposes no customs duty on equipment for larger projects.
Domestic equipment makers including state-run Bharat Heavy Electricals Ltd as well as Larsen & Toubro and its joint venture partner, Japan's Mitsubishi Heavy Industries, are expected to benefit from the move.
Other global gear makers with manufacturing joint ventures in India that stand to benefit include Hitachi and US-based Babcock and Wilcox.
"If this step is going to help domestic manufacturing gain some level playing ground, I think it's a good move," said R. Shankar Raman, chief financial officer of Larsen & Toubro.
Shares in Bharat Heavy Electricals closed 2.5 percent higher in anticipation of the government duty move, which was announced after the close of trading.
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