In a discussion with the electricity industry and key stakeholders in the sector, the Ministry of Power asked for a renewed focus on domestic production and announced restrictions on imports. R K Singh, Minister of State for Power, New and Renewable Energy of the Union, announced that a basic customs duty (BCD) would be imposed on imports of solar cells and modules. The Minister said the duty would come into force in August.
A 20% BCD on solar imports was proposed in the Union Budget 2020-21. The Ministry said, however, that it would remain zero. Solar cells and modules are exempt from any BCD as notified by the revenue department in 2005. “The BCD ‘s clear trajectory would be declared so that there is no uncertainty about government policy,” said the Ministry of Power’s public statement.
It stated that the Department would also issue an approved list of renewable energy models and manufacturers effective 1 October.
“This will ensure that all solar power projects which are bid out (in accordance with) the standard bidding guidelines will be required to procure solar cells, solar modules, and other equipment from manufacturers figuring on the approved list,” it said. The minister also informed the industry that financing by PFC, REC, and the IREDA would be structured in such a manner that developers who used domestically manufactured equipment would be charged lower rates of interest.
The minister also urged the industry not to import any equipment/materials/ goods in which there was sufficient domestic capacity.
He further said for those goods and services where domestic capacity was not available, “then it (import) should be allowed only for a fixed timeframe of 2-3 years”. “During this period indigenous manufacturing of these items would be developed by enabling policy/tax incentives/start-ups/vendor development/ R&D support so that in the next two-three years all these items get domestically manufactured. Till then goods so imported shall be tested in Indian laboratories for adhering to Indian standards and also to check the presence of malware,” the minister told the industry.
The minister also said prior approval from the ministry would be needed for importing power sector equipment.
“For promoting Make in India and reducing import dependency, it is essential that developers in transmission, thermal, hydro, distribution, and renewables need to join the national campaign of ‘Aatmanirbhar Bharat’ and wholeheartedly adopt the ‘Make in India’ policy of government of India,” Singh said.
Barring a few, all privately owned thermal power generation units, with a capacity of approximately 40,000 Mw, have been built on Chinese equipment over the last 10 years.
The public sector units relied on BHEL to supply boiler-turbine-generators (BTGs) for their power generation units.
However, according to the Central Electricity Authority, the thermal power units of leading private players such as Essar Power, Adani Power, Reliance Power, GMR Energy and Sterlite Energy have Chinese companies as their BTG suppliers.
At the same time , nearly 75% of Indian solar capacity is being built with Chinese solar cells and modules at a low cost. Indian electrical and electronics manufacturers have long complained against Chinese counterparts about their low market rates and safety concerns.
According to the Indian Electrical and Electronic Equipment Manufacturers’ Association (IEEMA), imports of Chinese electrical equipment have increased by 19 percent over the last decade.
