Established in 1969, Technical Associates Ltd (TAL) is a reputed supplier of power and distribution transformers to both the domestic and international markets. In this exclusive interaction, we have Vinamra Agarwal, Director, Technical Associates Ltd, discussing the company’s recent achievements whilst providing a glimpse of TAL’s future plans. Agarwal also shares his insights on critical industry-related issues like availability of CRGO steel and procurement policies of discoms. The challenges notwithstanding, Vinamra Agarwal is confident that TAL, capitalizing on India’s massive growth in the power sector, will grow not just in terms of manufacturing capacity but also new product lines and new markets.
India appears sharply focused on enhancing its interstate grid resulting in good demand for 765kV transformers. In this reckoning, how is TAL progressing with its plan of producing such transformers at its Sitarganj plant?
Technical Associates Ltd is proud of being recognized as India’s leading power transformers manufacturers up to 400kV class. Our track record and history over the last 55 years is proof of our capability to successfully embrace technological disruption and constantly move up the value curve. We are now successfully manufacturing power transformers up to 400kV at our manufacturing factory at Sitarganj in Uttarakhand, with test facilities also accredited by NABL for testing transformers up to 400kV.
Due to the current demand scenario in the country we are experiencing an increased demand for not just 765kV transformers, but also 132kV and 220kV transformers. Accordingly, we have decided to restrict manufacturing in Sitarganj up to 400kV only.
We have, however already announced plans for setting up a state-of-the-art facility for manufacturing 765kV power transformers at Lucknow in Uttar Pradesh. This facility is expected to start by the end of Q12026 and would cater essentially to transformers of 220kV and above, up to 765kV.
You had mentioned that TAL was working on capacity expansion to 18,000 MVA per year? What is the current status?
We have already achieved production of 11,000 MVA in FY24 and the same is expected to reach to about 14,000 MVA by end of FY25. We have already taken up some critical de-bottlenecking and investment enhancement initiatives which are expected to be operational by May 2025. With this addition we expect our production output for FY26 to reach approximately 17,000 MVA.
We hear that some Indian steel conglomerates are planning to produce CRGO steel locally. What is your overall take on India’s longstanding and complete dependence on imports for CRGO?
CRGO continues to be a constraint for the country, and this has strategic ramifications. It is a very obvious gap in the country’s self-reliance on being able to provide energy security for our growing economy. It is therefore unquestionable that there needs to be a much larger manufacturing capability for CRGO than what has been presently envisioned.
To give a brief perspective, today China accounts for roughly 70 per cent to 80 per cent of global CRGO production and this cannot obviously be a source of comfort for our policy makers! While plans of some companies for setting up CRGO manufacturing in the country have been welcomed, I believe that many such more facilities need to be created.
With a single manufacturer, without any regulation, the industry will continue to face the risk of monopolistic pricing to maximize their returns and hence it is absolutely essential that the Government should earmark this sector as being strategically important and put the same kind of efforts in increasing domestic production capacity as we are seeing currently being put in sectors like semiconductors, electronics, energy storage, etc.
How is the recent rise in international CRGO prices, as well as other raw materials, hurting domestic transformer manufacturers?
One subject that has perhaps not very well understood by most Indian buyers and policy makers is that we are witnessing a massive surge in transformer demand globally. From the United States of America to Europe and to South East Asia, we are witnessing a huge demand to grow and invest in transmission infrastructure and also make it ready for the green energy transition. This has created a very high demand for CRGO steel.
As a result, we have witnessed a sharp increase in prices of CRGO over the last 12 months. It must also be appreciated that the BIS certification on CRGO serves as a further impediment or deterrent for global steel companies to sell their material in India. If my information is correct, only a fraction of global steel manufacturers are today registered and approved by BIS. This has also contributed to the sharp increase in pricing of CRGO, especially when global CRGO steel manufacturers are able to find large markets closer to their manufacturing facilities where such restrictions like BIS registration etc. are not present.
This has also led to the overall increase in the cost of the transmission infrastructure that we are building, which in my view could have easily been avoided and deployed in other critical areas of need for our country. Since a bulk of the raw material used in the manufacturing of transformers i.e. CRGO steel, copper, oil is pegged to international markets, we have seen a very sharp increase in these costs.
While the IEEMA PVC (price variation clause) offers some degree of comfort to those manufacturers who maintain the discipline to not work on fixed price basis in times of such volatility, I believe that those manufacturers who have taken a gamble on commodity prices would perhaps have been impacted the hardest.
While our policy makers need to look at a sector like CRGO more seriously towards easing domestic supply; I also believe that in times of such volatility it is only the manufacturers who would abide by the IEEMA PVC would continue to survive and thrive over the long term.
Has there been any recent change in policies regarding mandatory BIS certification of international CRGO suppliers?
I understand that there is no major change with regards to BIS certification on CRGO except for the fact that one or two Chinese and Korean mills whose registration had expired have perhaps been successful in getting the same renewed.
What has so far been the positive impact of TAL’s accreditation for testing of 400kV transformers?
This has been a huge positive impact for us as we have traditionally not been a 400kV manufacturer capacity. Creating 400kV test infrastructure and getting the same accredited by NABL for conformance to ISO / IEC 17025 has been a huge confidence-booster amongst our customers for trusting us for manufacture of 400kV class transformers.
It is believed in industry circles that the advent of NHPTL hasn’t really made a big impact on India’s self-sufficiency in EHV transformer testing? What is your general view on India’s self-reliance in this field?
I disagree with this view. Setting up of NHPTL has been a landmark step in creating the necessary self-sufficiency for testing of EHV power transformers. Please remember that prior to setting up of NHPTL, manufacturers had to send 400kV and 765kV transformers to labs like KEMA or CESI which was an extremely expensive and time taking proposition. I understand that there have been a few teething issues at NHPTL due to which the facility could not be used optimally in the past years. However, I am now getting information that a large number of transformers are being sent for short circuit testing to NHPTL on a regular basis now. As the demand for 400-765kV manufacturers only increases, I feel that this volume will only increase.
I would however also mention a word of caution – one of the major challenges that manufacturers face after getting their transformers short circuit tested at NHPTL is that NHPTL is still not yet a member of the STL (Short Circuit Testing Liaison). As a result, most global utilities do not accept the short circuit test reports issued by NHPTL. This means that even if a manufacturer has invested a significant amount in getting a short circuit test conducted at NHPTL, they would still not be able to use the same to tap global opportunities.
On another related issue, I honestly believe that restricting short circuit test validity for only five years in the case of power transformers is a self-defeating policy that neither adds any value nor plays any major role in improving the quality.
I strongly believe that if the manufacturer has not changed the design of the transformer, there will be no major change on account of changes in manufacturing technique or material essentials which could impact withstand capability of transformers within a five year period. The validity period therefore needs to be urgently revised to a minimum of ten years.
On a related matter, when TAL starts production of 765kV transformers, would you need the services of foreign labs for testing?
If NHPTL is able to get itself registered as a member of the Short Circuit Testing Liason, I don’t think that there will be much need to send transformers to foreign labs for testing.
TAL has been a longstanding and established domestic supplier of transformers, particularly in the 132kV and 220kV class. How do you see the exports market for these transformers?
As I have mentioned earlier, there is huge global demand for transformers of all sizes and ratings. The same is also not being catered to effectively by existing manufacturers in the West. As such there is a strong potential for Indian transformer manufacturers to export large power transformers to global markets.
However, in order to achieve this, manufacturers also need to invest significantly in their people /processes to be able to deliver transformers as per global expectations. In parallel, I also believe that the Indian government will play a critical role in helping manufacturers achieve both size and scale to be able to successfully target these markets. As for TAL, we are seriously exploring several markets to export 132/220kV transformers.
India has the dubious distinction of having the highest failure rate of distribution transformers, with much of this attributed to flawed procurement policies of government-owned procurement agencies. What is your overall view on the subject?
I think it is incorrect to put the blame squarely on flawed procurement policies. Anybody who only points out to flawed procurement policies of discoms has seen only half the picture.
Discoms are ultimately commercial entities and it is their right to seek lowest possible cost for equipment being procured by them. It is also the responsibility of manufacturers to be able to maintain their sanity and regardless of the competition/ price pressure to understand what product they are willing to sale and at what price. While L1 procurement practices without adequate checks on past performance etc. do create the conditions that contribute to such failures, inadequate or poor maintenance of distribution transformer assets is also major contributor.
As an example, one can very easily observe distribution transformer failure rates in both private sector utilities and public sector utilities and the reasons would be very clear. On the same note I would also like to add that one step that is being taken by several utilities, which is to increase the warranty period coverage up to ten 10 years or even longer, is slightly regressive. It does not make sense from the long-term strategic prospective of any utility because having a 10-year warranty automatically reduces the incentive of the engineers using the system to properly maintain the same. This practice, if allowed to continue, will also lead to a gradual decline in technical competence among the utility engineers, which in turn could potentially have a long-term negative impact on the country.
India has outlined Rs.9 trillion worth of investment in the power transmission sector between now and 2032. The transformer industry, as we perceive, would definitely be a big beneficiary. In this backdrop, how do you see the years ahead for TAL?
We are extremely optimistic about the growth prospects of the industry. We have been long believers of India’s story and continue to believe that even beyond 2032 India will continue to lead to make significant investments in the power sector to maintain its growth trajectory.
Our per-capita energy consumption is still amongst the lowest in the world, at around 2,000 kwh, while most of the developed world is at 14,000-15,000 kwh. This means there has to be a jump of minimum 4 to 5 times in order to reach a developed country standards. In conjunction with India’s large population of 1.4 billion, this represents a huge opportunity for the entire energy sector and the power T&D sector, in particular.
We are preparing to aggressively capitalize on this growth in future and are keen to expand both vertically, into higher voltage classes; as well as horizontally, in new innovative product lines and new markets.
