China systematically killing Indian manufacturing: L&T

Yusuf

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SURAT: Private sector engineering major Larsen & Toubro has said that China is systematically killing Indian manufacturing sector and sought 25 per cent anti-dumping duty on Chinese goods.

"China has a fixed currency. It is not a market economy like ours. China is systematically killing the Indian manufacturing sector," L&T chief Naik, who was here for foundation stone laying ceremony of a forgings unit at Hazira told reporters here yesterday.

"There are taxes on goods manufactured locally, but none on imported products (from China). This is an unfair situation for Indian goods. This is why there should be 25 per cent anti-dumping duty on Chinese products," Naik said.

Speaking specifically about power equipment sector, in which L&T is a major player, Naik said, "The Indian power companies, especially those in the private sector, have placed huge orders for power plant equipment with China. We can say that Chinese power sector is virtually working for India."

"It is not good that 80 per cent of our dependence for power plant equipment is on one country, and that too China," he said, adding that China should not be allowed to grow at the cost of Indian companies.

"The day China opens its economy, its prices are bound to go up by 25 per cent," he said. "But unfortunately we are not taking any steps to stop it," Naik further said.

L&T's special steel manufacturing and ultra heavy forgings unit at Hazira is a joint venture with Nuclear Power Corporation of India Ltd (NPCIL), in which L&T holds 74 per cent stake while the latter 26 per cent.

The plant is being set up at an investment of Rs 1,750 crore, and will supply finished forgings for nuclear reactors, pressurisers and steam generators, besides heavy forgings for critical equipment in the hydrocarbon sector, as well as thermal power plants and steel plants. The unit is expected to begin operations between March and May next year.

L&T is also investing over Rs 5,000 crore for setting up facilities to manufacture boilers, turbines, modular fabrications. It is also establishing a ship-building unit and a power plant at its Hazira facility.

"The boiler shop will be opened in March or April this year, which will be followed by the turbine shop in August or so," Naik said.
I tend to agree with L&T. The Chinese by way of controlling its currency and closed economy is killing competition. If India was to devalue its currency and fix it at say Rs 60 to a dollar and peg it at that level, i am sure other countries would cry hoarse.
What is also needed is a sustained international effort to put pressure on China to stop its unfair trade practice by means of controlling its currency and market.
But i read just a few days back that the officials of the CCP have made it clear that they do not intend to let its currency free anytime soon if at all.
 

p2prada

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They have to control their currency if they have to overcome loses from NPLs and the stimulus spending.
 

badguy2000

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I tend to agree with L&T. The Chinese by way of controlling its currency and closed economy is killing competition. If India was to devalue its currency and fix it at say Rs 60 to a dollar and peg it at that level, i am sure other countries would cry hoarse.
What is also needed is a sustained international effort to put pressure on China to stop its unfair trade practice by means of controlling its currency and market.
But i read just a few days back that the officials of the CCP have made it clear that they do not intend to let its currency free anytime soon if at all.
the first that crys hoarse would be the common indians like you,guy.

Once Rs were to be devalued 60,then common Indians like you would find almost the price of everything were rising,from petrols,foods,electricity...etc,because the price of import would rise much.

economy is a system. you can not have a unilateral change. one rise here will cause one down there inevitably.
 

nimo_cn

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Funny!
Suddenly, China is responsible for the incompetence of Indian manufacturing. In my opinion, you should blame no one but yourself for this.
 

ppgj

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Funny!
Suddenly, China is responsible for the incompetence of Indian manufacturing. In my opinion, you should blame no one but yourself for this.
nothing to do with incompetence. india produces high quality power equipment but due to cost loses. import from china does not attract duty compared indian own equipment. that is what he is talking about. read it properly.
 

Armand2REP

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Funny!
Suddenly, China is responsible for the incompetence of Indian manufacturing. In my opinion, you should blame no one but yourself for this.
Chinese undervalued currency, export tax rebates, subsidised fuel and raw materials make it all but impossible to conduct a fair trade. What China is doing is called "dumping" and is against WTO trade laws. The US currently has several lawsuits against China for this very thing and their own anti-dumping duties.
 

nimo_cn

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nothing to do with incompetence. india produces high quality power equipment but due to cost loses. import from china does not attract duty compared indian own equipment. that is what he is talking about. read it properly.
When people buy things, they will consider both quality and cost, if you fail in either term, you may lose.
So, even if what you said is true, that India produces high quality but relatively expensive power equitment, which i dont believe, that is called incompetent.
 

ppgj

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When people buy things, they will consider both quality and cost, if you fail in either term, you may lose.
So, even if what you said is true, that India produces high quality but relatively expensive power equitment, which i dont believe, that is called incompetent.
great insight for competence!! does it apply to the western world too?

why don't your country turn market economy and see where your cost and quality stand?
 

sky

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Funny!
Suddenly, China is responsible for the incompetence of Indian manufacturing. In my opinion, you should blame no one but yourself for this.
India is spending huge amounts of money to increase the power supply .The big problem is not just chinese competition,but poor planning by india. Bhel and l&t have all increased there output but it's still not enough.

If india wonts continuous electricity then new power station's are needed,the problem is not enough investment was made to increase output.Hence anil ambani buying power equipment from china.GOI must share some responsibility as well.

People that blame others for there ill's are just feeling sorry for themselfs,just get on with the job of building india.Enough time has already been wasted .
 

Armand2REP

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How is it India's fault China conducts illegal trade practices? India won't break WTO regulations or they will face the same trade war China is starting and will eventually kill their exports.
 

Quickgun Murugan

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I remember reading the same news like during August 2009 when L&T CEO AM Naik mailed the finance minister regarding this.

I am sure this aspect will be under due consideration by FM.

On the other hand, Indian companies should also try to be competitive in bidding along with the chinese.
 

ppgj

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India is spending huge amounts of money to increase the power supply .The big problem is not just chinese competition,but poor planning by india. Bhel and l&t have all increased there output but it's still not enough.

If india wonts continuous electricity then new power station's are needed,the problem is not enough investment was made to increase output.Hence anil ambani buying power equipment from china.GOI must share some responsibility as well.

People that blame others for there ill's are just feeling sorry for themselfs,just get on with the job of building india.Enough time has already been wasted .
agree partly. india won't be able to supply enough for the demand. it may not supply 100% but definitely can major portion of it.

the issue L&T chief is talking about is not about supply/demand but unfair treatment by our own govt.

"There are taxes on goods manufactured locally, but none on imported products (from China). This is an unfair situation for Indian goods. This is why there should be 25 per cent anti-dumping duty on Chinese products," Naik said.
it is because chinese currency is not market dictated but rather controlled by their govt to its advantage. this is what puts their exports at advantage. even americans like the rest of the west are complaining too.

the moment their currency becomes market dictated, cost will evaporate.

btw the investments and capacities are being added.

http://www.business-standard.com/india/news/boom-time-for-power-equipment-companies/19/52/368827/
 

badguy2000

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[mod] Do not get personal , take this as warning Liu [/mod]
 

sandeepdg

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When people buy things, they will consider both quality and cost, if you fail in either term, you may lose.
So, even if what you said is true, that India produces high quality but relatively expensive power equitment, which i dont believe, that is called incompetent.
What the hell do you know about the industrial capabilities of India ? The only reason we are lagging behind China is because of the government's lethargy in helping the industry and infamous red-tape of the bureaucracy. But, that doesn't prevent our industry from producing world-class high quality goods. Larsen & Toubro for that matter pal, is one of India's best, biggest and most respected heavy engineering, construction and info tech companies having a presence in the 10 most important business capitals of the world and customers spanning 30 countries including most of western Europe, North America, Middle-East and Asia including Japan & China.They even have a manufacturing facility in China. BHEL (Bharat Heavy Electricals Limited), the biggest and best power equipment producer in India, for that matter is one of the top 10 leading power equipment manufacturers in the world and supplies more than half of India's power industry's equipment needs. The main reason for choosing Chinese equipment by Indian companies is because Chinese products are 10-15 % cheaper than the Indian ones because of the numerous subsidies provided by the Chinese government and mass production of components that we cannot match in scale as of now. Surely, when the chief of the company that constructed the world's longest LPG pipeline, the world's largest Fluid Catalytic Cracking Regenerator, world's longest Product Splitter and Asia's highest viaduct makes a point, he knows what he's saying !!

By the way, an interesting read about Chinese quality:

http://www.thehindubusinessline.com/2008/08/12/stories/2008081251500300.htm
 

ppgj

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Funny!
Suddenly, China is responsible for the incompetence of Indian manufacturing. In my opinion, you should blame no one but yourself for this.
look at your competence -

Three Chinese engineers have been arrested for last year's accident at the Bharat Aluminium Company Ltd (BALCO) plant in Chattisgarh's Korba district. Forty five people died in that accident.

A gigantic chimney, 250 feet high, had collapsed in September at the BALCO thermal power plant. The labourers who died were mainly from Bihar and Jharkhand. BALCO had commissioned a Chinese company, SEPCO (Shandong Electric Power Construction Corporation), to build the chimney at the 1200 megawatt power plant.
3 Chinese engineers arrested for chimney collapse

note : a video is also in that link.
 

nimo_cn

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I have spent some time on the thread regarding Arjun. People told me Arjun is supeior to
T90, but now IA is massively inducting T90, instead of Arjun.
Now we are talking about power equipment, people tell me power equipment manufactured by India is better than equipment manufactured by China, but the situation here is India is massively purchasing Chinese power equipment and a Indian businessman even is whining that China is killing Indian manufacturing on the newspaper.

I always admire the Indian members' patriotism, especially when it comes to Made-In-India. So if you are so confident about your industry capacity, then you should stop complainning. Be mature, no one can kill your manufacturing if it is as fabulous as you claim. On the contrary, i am concerned one day India will kill Chinese manufacturing after i read what sandeepdg has posted. Who knows!
 

nitesh

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nimo if you read the news carefully it is more about giving the lavel playing field to local manufacturers by either levying additional taxes on imported equipment or removing the taxes from local made equipment. There is nothing wrong in asking for level playing field.
 

nimo_cn

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Armand2REP

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45 people dead for the poor quality of Indian contructor, chinese company sub-contracted the project to a local constructor!!!
Indians are responsible for the poor quality materials and poor design by Chinese engineers and project managers? Sub-contractors don't design and they only provide material that is paid for. It is all in the hands of China.
 

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