India’s desire to block Chinese power firms will only hurt its own people’s interests
By Published: May 24, 2017 11:33 PM
India's reported move to block Chinese companies in the power sector seems to be new evidence of the country's overly suspicious attitude toward China, but this could backfire given that India is still plagued by electricity shortages and unstable supply.
According to a report on Monday by the Economic Times, India will soon introduce a policy to bar Chinese companies from investment projects in the domestic power sector due to security concerns, a move Indian Electrical & Electronics Manufacturers' Association Director General Sunil Misra was quoted as saying would protect India "from cyber attacks because the power sector is increasingly software driven with intelligent technology and control systems being used."
Such security concerns actually seem like unnecessary paranoia, especially in a country where about 300 million people still have no access to electricity and many regions face the problem of inconsistent power supply. Also, India's per capita electricity consumption is among the lowest in the world, reaching 805 kilowatt-hours in 2014, as against 3,927 kilowatt-hours in China, according to data from the World Bank.
The Economic Times report also cited the reciprocity factor as a reason, explaining that as China does not allow for overseas investment in its electricity grid, India would also bar Chinese companies from similar projects. The reciprocity argument is unreasonably idealistic and doesn't make any sense at all. Even if China allowed overseas investment in its power sector, could Indian power companies really make it into the Chinese market given their lack of development?
For a long time, Indian power companies have been calling for a complete ban on Chinese companies in the domestic power sector, citing the threat to national security.
Of course, such a prohibition, if it became real, would cause losses for Chinese companies. But it is totally unrealistic and inefficient for a country that relies heavily on foreign technology and equipment due to its own underdeveloped power sector, because it would be hard and costly for India to seek substitutes for Chinese products. At present, Chinese companies are the major suppliers of power generation equipment in India, accounting for about 40 percent of the traditional power equipment market, according to media reports. As such, India's boycott of Chinese equipment would be at the cost of its electricity infrastructure development, eventually making its people the biggest losers.
The author is a reporter with the Global Times. bizopinion@globaltimes.com.cn
According to a report on Monday by the Economic Times, India will soon introduce a policy to bar Chinese companies from investment projects in the domestic power sector due to security concerns, a move Indian Electrical & Electronics Manufacturers' Association Director General Sunil Misra was quoted as saying would protect India "from cyber attacks because the power sector is increasingly software driven with intelligent technology and control systems being used."
Such security concerns actually seem like unnecessary paranoia, especially in a country where about 300 million people still have no access to electricity and many regions face the problem of inconsistent power supply. Also, India's per capita electricity consumption is among the lowest in the world, reaching 805 kilowatt-hours in 2014, as against 3,927 kilowatt-hours in China, according to data from the World Bank.
The Economic Times report also cited the reciprocity factor as a reason, explaining that as China does not allow for overseas investment in its electricity grid, India would also bar Chinese companies from similar projects. The reciprocity argument is unreasonably idealistic and doesn't make any sense at all. Even if China allowed overseas investment in its power sector, could Indian power companies really make it into the Chinese market given their lack of development?
For a long time, Indian power companies have been calling for a complete ban on Chinese companies in the domestic power sector, citing the threat to national security.
Of course, such a prohibition, if it became real, would cause losses for Chinese companies. But it is totally unrealistic and inefficient for a country that relies heavily on foreign technology and equipment due to its own underdeveloped power sector, because it would be hard and costly for India to seek substitutes for Chinese products. At present, Chinese companies are the major suppliers of power generation equipment in India, accounting for about 40 percent of the traditional power equipment market, according to media reports. As such, India's boycott of Chinese equipment would be at the cost of its electricity infrastructure development, eventually making its people the biggest losers.
The author is a reporter with the Global Times. bizopinion@globaltimes.com.cn
