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    Lens on foreign firms investing in power sector

    Synopsis

    Overseas firms eyeing investments in power plants in the country may have to undergo security clearances and may be mandated to employ majority Indian nationals.

    ET Bureau
    NEW DELHI: A high-level panel will look at possible checks on foreign firms investing in the Indian power sector, a move aimed at preventing cyberattacks on the electricity grid. This comes about two months after the eastern electricity grid suffered a malware attack, allegedly from China.

    Overseas firms eyeing investments in power plants in the country may have to undergo security clearances and may be mandated to employ majority Indian nationals including at top managerial positions, a senior government official said. The restrictions are in line with India’s commitments to WTO, said the official, who did not wish to be identified.

    The panel being set up by the government will study recommendations of a report on cybersecurity issues in the power sector prepared by a committee that includes officials of the Central Electricity Authority (CEA), ministries of power and commerce, and industry associations. The committee has also recommended allowing only those foreign companies that have minimum work experience in India, and seeking details of origin of raw material used in the projects.

    The report has recommended that firms with base in countries that do not allow imported goods without testing should be treated similarly in India. ET on Tuesday reported that the government will lay down product-wise technical specifications and regulations to ensure that only audited and tested equipment are connected to the electricity grid. The regulations will be country neutral and will aim at boosting local manufacturing.

    The proposed committee will be headed by a senior executive of the CEA and include senior officials from the power, commerce and IT ministries, executives from state-run firms such as NTPC and PGCIL, and other industry representatives. It will suggest ways to secure the Indian electricity grid from malware and encourage domestic manufacturers.

    “This is one of the first steps being taken to protect the electricity grid. The government has realised and recognised the need for such measures in the wake of a recent attack on eastern power grid, reportedly from China,” another government official said on condition of anonymity.

    Most private power generators prefer Chinese power equipment that comes with cheaper line of credit. Chinese firms such as Dongfang Electric Corporation, Harbin Electric International Company and Shanghai Electric have bagged a chunk of equipment orders from Indian power developers in the past.

    ET View: Target Energy Security
    Restricting foreign stake in power companies is a bad idea. India must take steps that further its energy security goals, and should focus on making it possible for Indian companies to become competitive. Security checks make sense, especially given the vulnerability of power systems to outside attack. Rather than a diktat on hiring local workers and executives, the focus should be to invest in their training and skilling.


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