Anwani said the notification should be viewed as a measure to improve the availability of critical components rather than a policy shift favouring Chinese suppliers.
He added that it covers products such as bushings, insulators and other components that have contributed to longer delivery timelines for original equipment manufacturers (OEMs).
According to Anwani, Indian and multinational companies operating in the HVDC ecosystem have already announced cumulative capital expenditure of more than ₹10,000 crore to expand local manufacturing capacity. However, shortages of certain specialised components have continued to affect project execution.
He said the government’s move could help ease pricing pressure and improve delivery schedules for OEMs by increasing the availability of these components.
While the announcement triggered a sell-off in Hitachi Energy India, Anwani said the market reaction was also influenced by valuations.
He said that PL Capital had earlier downgraded its view on the sector because stock prices had run ahead of fundamentals despite healthy order books.
Anwani also said the exemption is unlikely to materially impact future HVDC contracts as localisation requirements remain in place.
“It is unlikely that the government will allow traded goods to come from China,” he said, adding that suppliers will still need to manufacture locally to meet project requirements. He noted that all HVDC projects are required to have at least 60% local content by the financial year 2034-35 (FY35).
PL Capital has downgraded its ratings on Hitachi Energy India and Hitachi Energy India due to valuation concerns. However, among companies in the power equipment space, Anwani said Indo Tech Transformers remains his preferred stock.
He added that while the long-term outlook for the sector remains supported by investment in transmission infrastructure, investors should remain selective given current valuations.
For the full interview, watch the accompanying video
Aditya Mongia, Analyst at Kotak Institutional Equities, said the government’s decision to allow four Chinese power equipment companies with manufacturing facilities in India to participate in PSU tenders for two years is unlikely to materially impact domestic transformer manufacturers.
He said the companies have limited spare manufacturing capacity relative to the more than ₹1 lakh crore transmission and distribution opportunity, while the exemption could help ease supply constraints in select power equipment segments.
Mongia also noted that valuations across the sector remain ahead of underlying fundamentals.
For full interview, watch accompanying video
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(Edited by : Prashant)
First Published: Jul 3, 2026 3:27 PM IST
