India's economy has experienced dramatic growth over the last few decades. In fact, the country is now the second most attractive destination for foreign direct investment (FDI) after China. India's gross domestic product (GDP) is projected to grow at around 8.5% for 2010-2011. In addition, the country has a FDI of $31.7 billion for 2009-2010 and a target goal of $50 billion by 2012.

For long an agrarian economy, India has witnessed a marked shift over the last 20 years. Agriculture's share in India's GDP today has dropped well below 20%. The economic reforms and liberalization introduced in 1991-1992 have propelled India's services and manufacturing sectors to more than 80% of current GDP. Sustained growth of India's GDP at levels of 8% to 10% is only possible if matched with a similar augmentation to the installed generation capacity, according to the planning commission's “Integrated Energy Policy.”

Gold Mine of Opportunities

The opportunity is best understood when we see that the present generation capacity of about 170 GW, built over the last 63 years since India's independence, is planned to be doubled in the next eight years. This naturally results in proportionate augmentation of the transmission and distribution (T&D) networks. Viewed in its entirety, the opportunity is valued at $350 billion over the next eight years for players in the three segments of generation, transmission and distribution. A similar trajectory of capacity addition, and business opportunities, is expected to be maintained until 2030.

This opens the door to increased investments in the T&D sector, worth $10.8 billion for 2009-2010. India's T&D segments, collectively estimated to require an investment of $97 billion and $138 billion for its 11^th five-year plan period (2007-2012) and 12^th five-year plan period (2012-2017), respectively, provide ample opportunities for T&D equipment manufacturers around the globe.

The Indian government, with its robust policies and regulations that allows 100% FDI for the power sector in India (except for the nuclear power category), has created a climate and infrastructure highly favorable for foreign investors. The Indian power sector is estimated to have received a cumulative FDI inflow of $5.6 billion from April 2000 to November 2000, and $1 billion for April 2010 to November 2010.

Dedication to Quality Products

Currently, India's bulk transmission is 400 kV and 765 kV. The country also has begun work on 1,200-kV systems. Historically, India's electrical equipment manufacturers have followed IEC standards. With globalization firmly in place, Indian manufacturers also produce equipment, which conform to U.S. and Canadian standards such as ANSI, NEMA, IEEE and UL. In-house testing labs are elaborate and modern, as are the independent certification labs around the country.

Firm policy interventions also direct the production of high-efficiency consumer appliances and industrial apparatus. A Star labelling program, initiated by the Bureau of Energy Efficiency, requires equipment like distribution transformers to carry energy-efficiency ratings.

As a result, India's government has made a continuous and constant effort to upgrade the quality of Indian products. This commitment to quality has not gone unrecognized. In fact, countries around the globe have had a more positive outlook and acceptance towards Indian manufactured products.

The mature Indian transmission and distribution industry not only caters to the domestic demand, but also exports to both developed and developing nations. The overall electrical equipment's exports of T&D products amounted to a modest $3 billion for 2009-10.

IEEMA: The Voice of India's Equipment Industry

As India's economy has experienced growth and the country has improved the quality of its products, the Indian Electrical and Electronics Manufacturers' Association (IEEMA) is helping in-country manufacturers of electrical, industrial electronics and allied equipment. Founded in 1948, IEEMA represents over 750 members whose combined annual turnover is more than $22 billion. IEEMA is actively involved in two major initiatives: smart grid technology and renewable energy.

IEEMA is not only involved in the country's major issues, but the association also sponsors an exhibition showcasing the latest advancements in T&D equipment, technology and services. For example, the 2010 event featured 1,000 exhibitors, 10 country pavilions and more than 100,000 attendees.

The world is watching India's growth story unfolding with power taking center stage. We welcome you to join us as we shape India's energy future.

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P.V. Krishna (pv.krishna@ieema.org) is the director general of IEEMA, India's apex industry association in this sector.

J.G. Kulkarni (jayantkumar.kulkarni@cgl.co.in) is the elected vice president of IEEMA and vice president of Power System (Asia) of Crompton Greaves Ltd.