A better way of achieving the same end is for domestic FIs and banks to insist that only those projects which have an Indian equipment supplier will be funded. It can be argued that foreign suppliers often supply critical parts. For example, for Frame 9 turbines, BHEL has to import critical components from GE, and it has to form a joint venture with Siemens for refurbishment ofpower plants. But it must be remembered that the technological agreement/joint venture has been entered into because the foreign player finds it profitable rather than do the project on its own.

The cost competitiveness of the local capital-goods industry can be judged from the fact BHEL has bagged 86 per cent of the projects under the international competitive route. Domestic manufacturers are competing against zero-duty imports, and duty benefits available to domestic players for deemed exports are notional, because cash is blocked.

Indian PPE suppliers have subsidised bankrupt SEBs by accepting payment as and when made. Under these conditions, Indian PPEs need all the help that they can get.