Indian grid equipment manufacturers are positioned to benefit significantly from US restrictions on foreign grid equipment suppliers, according to IIFL Institutional Equities. Renu Baid Pugalia, Senior Vice President – Research at IIFL Institutional Equities reports that these restrictions could create opportunities for Indian manufacturers as Chinese vendors lose market share. The analysis suggests that 10-15% of upcoming US grid equipment orders could be redirected to Indian suppliers, representing a substantial market opportunity for domestic manufacturers. Macquarie analysts believe the move could accelerate a China+1 shift in bulk-power systems, potentially giving companies such as GE Vernova T&D, Hitachi Energy, Siemens Energy and CG Power more room to expand exports to the US.
Transformer manufacturers are expected to be the first beneficiaries of this market shift due to their long lead times in supplying equipment to the US market. According to IIFL Institutional Equities, CG Power has already secured US orders, while Siemens Energy also maintains exposure to the American market. Additionally, GE Vernova has recently indicated discussions around supplying equipment for US data centers, positioning these companies advantageously for the anticipated market expansion. Macquarie notes that GE Vernova currently exports 33% of its production from India, while Hitachi Energy exports 26% and Siemens Energy exports 29%, providing a strong base from which to build US market presence.
The market opportunity extends beyond transformers to include the entire grid equipment value chain, as reported by IIFL Institutional Equities. Cable and conductor makers, including Apar Industries and Polycab India, could benefit as fresh orders move through the supply chain. However, TD Power Systems is unlikely to be a direct beneficiary because its exposure is primarily to the cogeneration business rather than grid equipment. Companies such as Thermax and MTAR Technologies, through their exposure to Bloom Energy, also operate in the cogeneration segment serving US data centers.
According to IIFL Institutional Equities, while the executive order does not explicitly mention China, it is expected to have a similar impact to earlier measures adopted by Europe and India that restricted Chinese participation in strategic sectors. This creates opportunities for alternative suppliers in the grid equipment market. The latest US order restricts certain foreign supplies of bulk-power system equipment, covering equipment used in transformers, reactors, generation equipment and control systems deployed across power plants, substations and transmission networks of 69kV or above. Countries subject to US arms embargoes or sanctions, including Russia, China, Iran, North Korea and Syria, fall within the covered category, while India is not subject to US arms embargoes or sanctions and is a strategic partner of the US.
The potential opportunity is less about an immediate change in demand and more about where the next wave of US grid procurement gets sourced from, according to Macquarie. With Indian companies already having a presence in the US market and expanding capacity, the latest policy shift could provide an additional tailwind. Macquarie continues to like Indian grid companies, with the Trump administration's move potentially giving India's power-equipment manufacturing push another export-led growth opportunity. Indian companies already supply a range of equipment to the US, including large power transformers, switchgear and circuit breakers, HVDC and grid-control systems, protection and automation systems, and data-centre power transformers.
