India’s gross value add (GVA)in manufacturing is estimated to be around $1 trillion by 2025, taking into consideration the existing growth and increase in export which will substitute imports.
Technological advancement and innovation is the key
Technological advancement and innovation is the key to truly achieve AtmaNirbhar Bharat in the solar manufacturing sector. It will also lower the dependence on imports eventually leading the way for an increased demand for local solar manufacturers.
To achieve this goal, the government should build integrated solar industrial clusters in India and create a specialized infrastructure covering the entire value chain from R & D, testing, training center, and other required supporting services.
By creating a value chain at a single location within the country will not only help India to compete with China at the domestic level but also in the international market. It will also reduce the reliability of duties/tariffs imposed by the Indian government.
Local companies to increase their production
The government’s focus on local manufacturing of solar power equipment as part of the Atmanirbhar Bharat strategy has pushed many of the local solar manufacturers to increase their production capacity in the next 2-3 years.
The final decision of the local companies to increase their production entirely depends on imports which has a foreign exchange outflow of around $18 billion. The setting up of manufacturing capacities to cater to the entire Indian would require around $4 billion investments which will be extremely beneficial in long run and will also create close to 3 million jobs.
Emmvee right from its inception in the year 1992 has set high standards of the manufacturing process. By taking the same standard forward, Emmvee has decided to increase its production capacity in the coming year to give domestic manufacturing a further boost. The increased production line will have the most advanced and world class state-of-the-art facility to compete with the best of the solar manufacturers across the world.
Latest government initiatives to encourage local solar module manufacturers
The government in a recent development has announced a production-linked incentive (PLI) scheme offering high-efficiency solar modules multiple benefits.
The scheme is aimed at minimizing Chinese imports by issuing a list of approved solar PV module manufacturers to support government-owned solar projects and related schemes. It also includes projects from where distribution companies procure electricity for their consumer supply.
The PLI scheme aims at curtailing the tariff barrier and provides financial support & subsidy for promoting local power equipment usage. The scheme also emphasizes the need to get prior-permission on imports from countries such as China.
The government has also taken the initiative to impose 40% basic customs duty (BCD) on solar modules and 25% on solar cells. This is a critical move from the government as it would make imports costlier leading to more demand for local manufacturing.
These successive orders are part of India’s strategy to reach the required local solar production requirement and also successfully help India to emerge as a leading global supplier of solar modules and solar other related products.