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Thursday, 25 Jul 2019
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Sunil Rathi, Director, Waaree Energies on India's RE capacity addition of 260 GW by 2022

Waaree Energies

Over the last few years, India has been attempting to expand its renewable energy capacities, by setting up more and more solar projects in the country. However, the domestic solar manufacturing industry is yet to receive similar support from the Government, which is vital to encourage solar adoption in the country. Thus, the Government’s new and ambitious target of achieving 260 GW of renewable energy capacity by 2024 is a welcome move.

Solar developers currently import modules from countries like China and Malaysia, and are exempted from safeguard duties if the project was commissioned before 30 July 2018. When safeguard duties were imposed, it was to provide respite to local manufacturers. However, developers still lean towards import of modules, owing to significantly cheaper costs. In India, manufacturers have to include the duties on manufacturing components in their final product costs, making them significantly more expensive and thus, an infeasible option for such project developers. Therefore, the effect of even the interim relief that safeguard duty would have provided is diminished due to the easy pass-through that international modules enjoy in the country. Despite being at par with their international counterparts regarding quality standards, Indian manufacturers are currently unable to realise their growth potential, due to feeble policy implementation.

In order for this domestic segment to grow exponentially, renewed focus must be placed on Indian manufacturers, supported by strong incentives for the adoption of Indian products. Furthermore, in order to unlock the true potential of the Indian solar manufacturing segment, leveraging the international market to attain economies of scale is a critical factor. Additionally, the anti-dumping duties imposed on imported solar cells must also be expanded to cover components like glass and EVA sheets, in order to prevent high manufacturing costs. Thus, the need of the hour is favourable export incentives from the Government, as well as appropriate import duties, to support Indian manufacturers, and motivate them to expand internationally, as well.

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