India is all set to bar Chinese power companies from projects in the power sector on security concerns after a policy that will define new conditions for foreign firms eyeing the multibillion-dollar market in one of the fastest-growing major economies in the world. A formal office memorandum, to be issued in a month, will insulate the power transmission sector from companies based in countries that do not allow Indian entities in similar projects.
Officials said the new reciprocity-based approach would impact Chinese companies that are looking to invest in the Indian electricity transmission sector. China does not approve of overseas investments in its electricity grid for security reasons, but India allows 100 per cent foreign direct investment in the power sector. The move will help India in several ways, including protection from cyber attacks because the power sector is increasingly software-driven with intelligent technology and control systems being used, said Indian Electrical & Electronics Manufacturers' Association director general, Sunil Misra.
US conglomerate GE's renewable energy CEO Jerome Pecresse said that reciprocity was a fair India. “Discussions have already been held with the commerce ministry. There should be reciprocity in trade. Other countries should not be allowed to exploit the Indian market while they protect their domestic players and space.” Another official informed that state governments will also be apprised of the reciprocity factor. The memorandum is under preparation and in all probabilities will be issued within a month.
“We should buy good and services for critical infrastructure only from a country which does not have any serious dispute with us and the relationship is not suspect. We will not buy a fighter aircraft or aircraft carrier from China. Similarly, we should not buy intelligent and smart transmission and distribution equipment from them given the fact that the Grid is becoming intelligent and increasingly vulnerable to cyber threat also,” Misra said.
