Indian water pump manufacturers have found an unlikely ally to fight Chinese competition: voltage fluctuation. Thanks to the erratic power supplied by Indian electricity boards to farmers, who are the major buyers of water pumps, Chinese products have literally disappeared from the market; five years ago, these products were considered a threat.
Most pumps imported into India from China are designed to withstand a narrow voltage fluctuation of 2V, whereas Indian manufacturers make products that can withstand a range of 110V (from 140-250V). As a result, Chinese-made pumps, which cost just around 75% of Indian pumps, stop working when the voltage fluctuates widely. “There is no threat from China. Our products are much better than Chinese,” claims Jayakumar?Ramdass,?vice-president?of the Southern India Engineering Manufacturers’ Association (Siema), an industry body representing 90% of pumpset manufacturers in the South.
The organized pump market in India, according to Siema is Rs3,000 crore a year and Coimbatore alone contributes nearly 50% of the market. With 900 units engaged in manufacturing pumps in Coimbatore, the production is fragmented and the top 10 units have a combined turnover of Rs750 crore.
Farmers initially bought the Chinese products, but soon found that the pumps could not withstand Indian conditions, said Ramdass, managing director of Mahendra Submersible Pumps Pvt. Ltd. “The design of our products are unique and take into account the conditions prevailing here,” he added.
According to Ramdass, Indian products have thermal overload protectors, which switch off machines when the temperature rises by 25 degrees Celsius. But the Chinese ones allowed the temperature to rise by up to 40 degrees Celsius. The products failed from overheating.
“Initially, there were some response from customers to Chinese products. But, now buyers don’t prefer Chinese products,” said P. Paramasivam of Kirtan Distributors Pvt. Ltd, which distributes branded pumps.
Poor after-sales service is another reason why people don’t buy Chinese pumps. According to K. Venkatakrishnan of Royal Corp., which sells water pumps in the city, there are now no dealers selling Chinese pumps in Coimbatore. Other distributors said a company called Imem Commercial Corp. was still distributing Chinese pumps in the city. The company did not respond to telephone calls made to it.
The real threat to large pump makers doesn’t come from Chinese products, but from local players that are called “kit pump” manufacturers because they import parts from different sources and assemble them. According to Siema, such kit pumps account for 70% of the total pump market in India, up from less than 40% a deacde ago. “They get price advantage by not invoicing their transactions, thus avoiding taxes,” Ramdass said.
The price difference between organized and kit pump producers typically range between 20% and 25%. Organized players have to pay an excise duty of 8%, in addition to value added tax of 4%.