Doubling Down On Solar: India May Soon Roll Out Plans For Rs 8,000 Crore Boost To Local Industry

The Union government is working on a plan to set up solar power generating capacity of about 12 gigawatts (GW) by 2022 through central public sector enterprises, Economic Times has reported.

Reports also say that the scheme has been carefully designed to ensure local industry gets to supply the solar components - the plan will circumvent World Trade Organisation (WTO) provisions and help the Indian solar power components manufacturing industry stand up to Chinese competition.

The plan skirts around prohibitive regulations of the WTO by ensuring that the power to be produced by the solar projects is utilised by public sector enterprises that will set up the new power plants. An earlier government mandate to ensure locally made components such as cells in the national solar mission has been stuck down by the WTO which was acting on a complaint from the United States.

The scheme will be a bonanza worth Rs 8,000 crore for the local industry which has also been pushing for imposing safeguard duties on solar equipment. According to recent reports the Indian solar industry has taken a hit due to imports of components from China, Malaysia and Taiwan. The Directorate General Of Trade Restrictions has also recommended that a 25 per cent safeguard duty be imposed on solar components import from Malaysia and China for a two year period.

India’s push comes at a time when the Chinese government has scaled down its solar power push. China’s scaling down in the field has left huge excess capacity in solar power equipment production, a development that has led to dumping of cheap panels and parts into markets such as India.

The proposed plan by government will see the planned 12 GW capacity set up by 2022, if things move according to schedule.