The current coverage choice of the Centre to desire native tools for renewable power tasks could additional its drive for ‘Make in India’ merchandise however is unlikely to offer any main push to the home photo voltaic producers.
The ministry of recent and renewable power (MNRE) in a notification issued final week stated that for any procurement by the Central authorities companies and nodal departments, the choice can be given to native merchandise for which there’s enough native capability. The discover enlisted near 80 merchandise starting from photo voltaic cells and modules to wind turbine, electrical tools for hydro, biogas and so on.
In procurement of all items and providers or works in respect of which there’s enough native capability and native competitors, solely Class—I native provider shall be eligible to bid regardless of buy worth, the ministry stated, reiterating a June notification by the Division of Promotion of Business and Inside commerce.
Class-I native provider pertains to any provider or service supplier, whose items, providers or works supplied for procurement, has native content material equal to or greater than 50 per cent.
“This order shall be relevant in respect of the procurements made by all companies beneath the MNRE, together with authorities corporations and by the states and native our bodies, making procurement beneath all central schemes the place the challenge is totally or partially funded by the federal government,” stated the MNRE order.
Business specialists identified the basket of mega-scale solar energy tasks with authorities corporations and coated beneath any Central scheme grant is low, in comparison with the tasks being supplied in any other case.
Tender for renewable tasks supplied by the Centre is issued by Photo voltaic Power Company of India, a wholly-owned firm of MNRE. Solely a hand stuffed with tasks, particularly these being set by central PSUs, come beneath any central grant. Moreover, there are tasks being supplied by PSUs which have a central grant or viability hole funding. Business executives stated the ratio is 1:10 for grant vs non-grant tasks.
“The value distinction between Indian and Chinese language photo voltaic gears is 20-25 per cent. So to bridge that, the Centre gives viability hole funding wherever native content material is necessary. Nevertheless, the viability hole funding beneath the Central schemes is proscribed. This skews the marketplace for home photo voltaic producers whereas a big market continues to be open to imports,” stated a senior sector government.
As a part of the nation’s current efforts to ban imports from China, the ministry has proposed 20 per cent Fundamental Customs Obligation (BCD) on imports of photo voltaic cells and modules. Near 80 per cent of India’s photo voltaic capability is constructed on Chinese language photo voltaic gears.
On the identical time the Directorate Common of Commerce Cures in a current order prolonged the safeguard responsibility of 15 per cent on photo voltaic imports coming from China for another 12 months. This was in response to a petition by a number of home photo voltaic producers asking for a level-playing discipline towards low-priced Chinese language imports.
This, nevertheless, can be counter-productive for large-scale gamers in Indian photo voltaic manufacturing area. Main gamers reminiscent of Adani Inexperienced, Vikram Photo voltaic, and Waaree Power are located in ‘particular financial zones’ (SEZs) and thereby come beneath the responsibility regime.
SEZ manufacturing items are thought of on a par with international corporations and therefore Customs responsibility is imposed on them too.
In accordance with the trade information, of the three,100 Mw of cell manufacturing capability in India, 2,000 Mw is located in SEZ. In module manufacturing, three,800 Mw out of the 9000 Mw is inside SEZ.
“The advantages accrued by way of native choice are nullified if the fee for SEZ-based photo voltaic items goes up as a result of duties imposed by the Centre. There must be a well-rounded coverage supporting all native producers and shutting imports maintaining in thoughts the wants of the sector,” stated a senior government of a number one photo voltaic gear manufacturing firm.
Home photo voltaic cell and module producers have urged the federal government to impose an ‘equalisation levy’ in order that items positioned in SEZ in order that they don’t seem to be damage by the federal government’s choice to impose BCD on photo voltaic imports.
The trade in a illustration in August stated if there’s absence of a level-playing discipline for SEZ items, home producers in SEZs should shut store and “might even see job losses in tune of 15,000 individuals”.