India's electrical equipment industry, while marking significant growth, grapples with challenges including high import dependency for key components and a scarcity of accredited testing facilities, Indian Electrical & Electronics Manufacturers' Association (IEEMA) President Hamza Arsiwala told ET Energyworld in an interview.

"Significant import dependency on various supply chain items and limited availability of accredited testing facilities for electrical equipment present global constraints," Arsiwala said, highlighting the hurdles facing the industry. He pointed out specific issues hampering Micro, Small and Medium Enterprises (MSMEs), such as liquidity challenges posed by the bank guarantee regime, non-uniform implementation of PVC clauses, and frequent price fluctuations in essential raw materials.

Despite these challenges, the industry has experienced a V-shaped recovery post-COVID, with double-digit growth over the past two years and a Compound Annual Growth Rate (CAGR) of 8 per cent over the last five years. "The industry's size exceeded USD $60 billion in FY22-23, with exports amounting to USD $11 billion," Arsiwala said, underscoring the sector's resilience and growth trajectory.

Arsiwala also emphasized the need for clearer state-level energy policies, particularly in emerging sectors like e-mobility, renewables, and green hydrogen, to address the compliance burden and facilitate easier access to financing for MSMEs.

Looking ahead, the IEEMA President outlined the industry's adaptation strategies to grid stabilisation challenges and the integration of intermittent renewable energy sources. "The integration of grid-level energy storage, along with R&D and innovation, is seen as a solution to manage the intermittent nature of renewable energy sources," he stated, indicating the sector's move towards sustainability and efficiency.

Despite the obstacles, Arsiwala is optimistic about the future, envisioning substantial expansion by 2030, driven by India's economic growth and the global shift towards sustainable energy. He highlighted the industry's efforts in preparing for the integration of green hydrogen into India's energy sector, advocating for supportive policy frameworks and fostering innovation and R&D to overcome current challenges and capitalise on future opportunities.