Is India on a delusional path to progress?
With the advent of the novel Coronavirus, the Indian economy is witnessing a major slowdown. While the nation is fighting the virus with all its might, businesses across sectors are reeling under the tremendous pressure of sustaining themselves. The ground reality of the Indian solar sector is no different. Even though the country has the potential to disrupt global frontiers in the long run, prompt measures need to be taken to provide immediate respite to the presently crippled domestic solar manufacturing sector.
While we appreciate the Government’s measures to aid the home-grown solar module manufacturers with various favorable policies and schemes like Atmanirbhar Bharat, PLI Scheme and the introduction of Basic Customs Duty, we believe that the Government needs to urgently ramp up domestic production of raw materials to enable us to increase manufacturing capacities. Additionally, we also need to invest in R&D to introduce innovations that will help us increase output without impacting manufacturing costs.
Presently, the country lacks a holistic manufacturing ecosystem to produce raw materials at competitive prices locally. Uncertainty may even discourage domestic players from purchasing Solar modules from Indian manufacturers ahead of the expiry of Safeguard Duties in July 2021. As the BCD comes into effect in April 2022, with no duty barriers on imports for 9 months, India will become a dumping ground for solar modules. Moreover, it is imperative to protect the present interest of the domestic manufacturers and infuse confidence among them.
While we are positive about the government’s support to the sector, transparency and clarification on existing policies will go a long way in bringing the manufacturers at ease.
Furthermore, while the recently announced PLI Scheme guidelines aim to uplift the sector by boosting manufacturing of high efficiency PV modules locally and generate employment, the allocated amount of funds is inadequate. To completely discourage dependency on imported modules, more funds need to be sanctioned, which will allow the manufacturers to set up local units and achieve economies of scale thereby helping the country fulfill its ambitious target of 175 GW by 2022.
The solar sector is recouping from the headwinds caused due to the second wave and requires immediate measures to bounce back to business. At the grass root level, we are in dire need of policies that are reassuring and corrective. If reforms are not implemented, it will lead to a shutdown of units in India and risk 300,000 jobs. The solar sector implores the government to stimulate the sector on its path to progress by first paying heed to our struggle to survive.
(Views expressed are author’s personal)