India’s economic offensive against China is anything but over, and Beijing is all set to be a casualty to yet another move of the Modi government which although is aimed at creating an ‘aatmanirbhar’ power sector in India; its ultimate objective is to kick out Chinese equipment completely from the country. Earlier, in July, right after the Galwan valley clash between the Indian Army and PLA troops which resulted in 20 Indian soldiers getting killed in action, the government had banned Chinese companies from participating in power transmission and distribution (T&D) projects. This had put an abrupt halt to China’s plans at gaining leverage, and even control over India’s national grid and critical power supply lines.
The latest move of the Modi government relates to India’s imports of critical energy and crucial power transmission equipment. According to a report by the Hindustan Times, the power ministry is all set to establish three manufacturing hubs all over the country to produce critical energy and transmission equipment, which is currently fully imported from other countries including China, under the Aatmanirbhar Bharat plan announced by Prime Minister Narendra Modi. Additionally, the ministry is also working on two embargo lists, items of which will face gradual and immediate import bans respectively, thus hurting China tremendously since it has been exporting India power equipment worth thousands of crores over the past many years.
The ministry is said to be preparing two lists. On the first, 239 items find mention, in which India has zero capacity to manufacture and, hence, must rely on imports till such time the manufacturing hubs come up in the country. The second list, however, contains 95 items which are being imported by the power sector despite being manufactured in India. The items on the second list will be immediately banned from being imported, and it has been decided that no power sector company, PSU or private, will be allowed to import items on the embargo list. Both these lists will be annexures with the Aatmanirbhar Bharat policy, the report added. The Indian power sector in 2018-2019 imported Rs 71,000 crore of equipment, of which Rs 21,235 crore came from China, according to the Directorate General of Commercial Intelligence (DGCI).
Once the manufacturing hubs are set up in India, the 239 items which are mentioned in the first list too will be produced in India, and therefore, in the next three to four years, their import too would be banned. Thus, before 2024 itself, the Modi government would have achieved a massive quantum of making India’s power sector self-reliant. This will also help secure India’s power lines and national grid form external forces, who might try to hijack them in times of a national security crisis. As for the three manufacturing hubs, the Hindustan Times report also stated that the Centre will ask states to bid for the same. The Centre also plans to give budgetary grants for creation of common infrastructure in these hubs, including 24×7 water, power, roads and common testing facilities.
Since 2016, Chinese involvement and influence in the Indian power sector was on a steady rise, with Chinese companies winning multiple important T&D projects. While their involvement in such projects has already been banned, China had an alternative route to interfere with India’s power sector – via the critical equipment which our country imports. The Modi government, however, has now ensured that such plans of the Chinese too are nipped in the bud.