Indian Firms Urge PMO to Review Chinese Entry Into Power Tenders

Leading Indian manufacturers of air-cooled condenser (ACC) systems have urged the Prime Minister's Office (PMO) and key government ministries to review a recent policy exemption that allows companies from countries sharing a land border with India, including China, to participate in government thermal power plant tenders, The Economic Times reported citing people familiar with the matter.

ACC systems are a critical component of dry-cooling technology used in thermal power plants and are generally supplied as part of larger engineering, procurement and construction (EPC) contracts.

Industry Flags Concerns Over Policy Exemption

In separate representations addressed to the PMO, the Ministry of Power and the Department for Promotion of Industry and Internal Trade (DPIIT), Paharpur Cooling Towers, Enexio Power Cooling and Holtec Asia have sought a review of the exemption, according to the report. They have also proposed a procurement framework that gives preference to domestically manufactured ACC systems.

The industry argues that procurement decisions should not be based solely on the lowest upfront bid. Instead, they say, the government should also account for lifecycle costs, execution reliability and foreign exchange outgo.

As per the ET report, relying only on initial pricing creates a misleading comparison that makes Indian-made ACC systems appear costlier, despite domestic manufacturers already exporting these systems to global markets.

Exemption Linked to BHEL Procurement

The industry's concerns stem from the Centre's decision in March to exempt ACC systems from registration requirements under Rule 144(xi) of the General Financial Rules (GFR), 2017, for the procurement of 21 critical inputs by Bharat Heavy Electricals Ltd (BHEL).

Rule 144(xi), introduced by the Department of Expenditure, restricts companies from countries sharing a land border with India from participating in government procurement on grounds of national security and defence. The exemption effectively permits Chinese suppliers to bid for eligible ACC contracts under the specified procurement.

Domestic Capacity at Risk, Say Manufacturers

The manufacturers contend that the timing of the exemption is particularly significant as India plans to add around 80 GW of thermal power generation capacity over the coming years, a pipeline expected to require nearly 100 ACC units.

They argue that increased competition from Chinese suppliers could discourage fresh investment in domestic manufacturing and undermine the substantial capital already deployed to build local production capabilities.

Industry Seeks 'Make in India' Safeguards

In a separate representation to DPIIT, the companies invoked Clause 10(d) of the Public Procurement (Preference to Make in India) Order, requesting government intervention to protect India's strategic ACC manufacturing sector.

The manufacturers argued that Indian firms continue to face limited and non-reciprocal access to China's public procurement market. Extending similar procurement access to Chinese suppliers in India, they said, puts domestic manufacturers at a competitive disadvantage.

Clause 10(d) empowers the government to impose reciprocal measures against countries that do not provide Indian companies fair and equitable access to their public procurement markets.