New Delhi, Oct 23 (IANS): Chinese manufacturers will now set up service centres in India to address the problem of repairing power equipment imported from the country.

During Prime Minister Manmohan Singh's on-going official visit to China, India and China signed a memorandum of understanding (MoU) in Beijing Wednesday to set up Power Equipment Service Centres (PESCs). China's National Energy Administration inked the MoU with India's ministry of power.

"The service centres would be adequately provided with equipment, personnel, spares and other facilities so as to enable them to provide all requisite spars and services support within India," a release from the Indian prime minister's office said.

The PESCs will be set up on commercial terms.

"The PESCs will be set up in India on market principles. The costs and terms of servicing power equipment will be decided between the PESCs and the end-user," said the PMO.

Indian power companies have purchased equipment for nearly 61,000 MW from Chinese firms, which are popular because of low costs and cheap financing. Nearly 45,000 MW capacity are under various stages of commissioning during the 12th Plan period (2012-17) with equipment from China.

There have been instances where equipment had to be sent to China for repair and power plants remained shut for months due to lack of service network in India.

Chinese equipment vendors do not have a manufacturing base in India, though its top power equipment makers are keen to set up manufacturing facilities and are seeking easier visa and import rules.

The union cabinet had last week approved the proposal allowing Chinese power equipment manufacturers to set up service centres in India.