BHEL, ABB and Other Capital Goods Share Prices Drop Up to 12% Amid Reports on Government Policy Change

Shares of major capital goods companies including Bharat Heavy Electricals Ltd (BHEL), ABB India Ltd, Siemens India Ltd, and Larsen & Toubro Ltd (L&T) declined sharply on January 8, 2026.  

The steep fall was triggered due to Reuters reports suggesting that India's Finance Ministry may remove restrictions on Chinese firms participating in government tenders. 

Capital Goods Stocks Register Significant Decline 

BHEL stock saw a slide of 12%, hitting the lower circuit limit. ABB India and Siemens India declined by 4.2% and 3.4% respectively, while L&T registered a dip of 3.2%.  

This slump in stock value marks the most significant drop for BHEL since June 4, 2024, when it fell 21% on the day of the Lok Sabha election result declaration. 

Government Contract Policy Under Consideration 

According to a Reuters report that cited unnamed sources, India's Finance Ministry is considering an end to the 5-year-old restriction on Chinese companies bidding for government contracts.  

These curbs were imposed in 2020 following the Galwan border clash, with conditions that included mandatory registration with a high-level committee and security clearance.  

The policy change could widen competition in government procurement, directly impacting domestic capital goods firms. 

Thermal Power Capacity Expansion Needs Drive Review 

The reported rationale behind this proposed change lies in the country’s aim to enhance its thermal power generation capacity to 3,07,000 MW in the coming decade.  

Restrictions have reportedly slowed down imports of power equipment from China, hindering expansion projects. A committee headed by former Cabinet Secretary Rajiv Gauba is said to have recommended easing import controls to allow faster project execution. 

The impact of the news was most pronounced on BHEL, whose shares opened with a lower circuit and fell by nearly 12%.  

Read More: Reliance Industries Shares Plunge 5%, Mark Biggest Intraday Fall Since June 4, 2024! 

Conclusion 

The reported move to ease Chinese firm restrictions in Indian government contracts has led to notable declines in capital goods stocks, particularly BHEL, ABB India, Siemens India and L&T. The market is responding to the expectation of increased competition, which may affect the domestic capital goods sector. 

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