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The Indian government is turning the screws on Chinese solar power equipment firms, keeping on hold decisions to grant them permission to feature in the approved list of solar photovoltaic (PV) models and manufacturers (ALMM), said two people aware of the development.

Being on the list is essential to do business in the world’s largest green energy market. Equipment of firms on the list can be sourced for government-supported schemes and projects from where electricity distribution companies (discoms) procure electricity. The ministry of new and renewable energy (MNRE) issued an order on 10 March enforcing this approved list, which features around 23 manufacturers and is a non-tariff barrier, effectively discouraging Chinese imports.

“Despite us submitting the paperwork a long time ago, no decision has been taken on including us in this list," said an India representative of a Chinese solar power equipment company, who is one of the two people mentioned above, on the condition of anonymity.

As part of India’s economic squeeze on China, manufacturers and solar modules are to be approved by the Bureau of Indian Standards (BIS) and the MNRE. Also, to be included in the approved list, an MNRE team has to inspect the facilities in China and conduct a production and sale audit.

“Only the models and manufacturers included in this list shall be eligible for use in government/government-assisted projects/projects under government schemes and programmes installed in the country, including projects set up for sale of electricity to government as per the guidelines issued under Section 63 of the Electricity Act, 2003, and amendment thereof," according to a 10 March MNRE order.

“The Indian team could not travel to the Chinese factories due to the pandemic. The applications have been pending for a while even after payment of fees," said the second person mentioned above.

India has a domestic manufacturing capacity of only 3GW for solar cells and 15GW for solar modules. The Indian solar space has been dominated by Chinese module makers such as Trina Solar Ltd, Jinko Solar, ET Solar, Chint Solar and GCL-Poly Energy Holdings Ltd.

Queries emailed to the spokespersons of Trina Solar, Jinko Solar, ET Solar, Chint Solar, GCL-Poly Energy Holdings and India’s MNRE and BIS late on Wednesday night remained unanswered till press time.

There is no easy way out, according to analysts. “MNRE had released an approved list of module manufacturers (ALMM). This implies that all bids auctioned post 10 April (notification date) will have to procure their module requirement from the list of manufactures specified on the list," according to a JM Financial Institutional Securities Ltd report.

“With travel restrictions in place, ALMM includes only Indian module manufacturers having a cumulative capacity of 8.1GW versus annual target additions of 25GW (to meet the 450GW renewable energy target by 2030)," the report added.

India has also introduced several measures to discourage solar equipment imports from China. These include imposition of tariff barriers such as 40% basic customs duty on solar modules and 25% on solar cells from 1 April 2022.

Recent developments have not been encouraging for Chinese suppliers. A case in point is global investors backing Indian solar developers planning to shun Chinese solar equipment supplies from Xinjiang over reports of alleged use of forced labour by manufacturers there, as reported by Mint earlier.

Also, certification and testing approvals for imported cells, modules and inverters from China have been delayed by the BIS. This is necessary to be eligible to sell here after India made it mandatory in 2017.

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