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NEW DELHI: India’s solar cells and modules imports fell to $571.65 million in the last financial year from $2.16 billion and $1.68 billion in 2018-19 and 2019-20 respectively, union power and new and renewable energy minister Raj Kumar Singh told the Lok Sabha on Thursday.

To promote domestic manufacturing, India has imposed tariff and non-tariff barriers such as a safeguard duty on solar cells and modules imported from China and Malaysia. Wafers and ingots--building blocks for manufacturing solar cells and modules--are key to India’s ambitious clean energy plans.

Of $571.65 million worth solar cells and module imports by India in 2020-21, China alone accounted for $494.87 million followed by Thailand that accounted for $18.76 million worth of “Solar PV cells/ modules (HS Codes – 85414011 & 85414012) imported during FY 2020-21." They were followed by Vietnam ($14.97 million) and Taiwan ($11.28 million).

Singh, in a reply to a question in Lok Sabha, said steps taken to enhance domestic manufacturing of solar PV cells and modules include modified special incentive package scheme (M-SIPS), Production Linked Incentive (PLI) Scheme, preference to local suppliers, domestic content requirement, imposition of basic customs duty on import of solar PV cells and modules and discontinuation of customs duty concession benefits.

As part of Atma Nirbhar Bharat or self-reliant India strategy, the Department for Promotion of Industry and Internal Trade (DPIIT) in an order dated 4 June made it compulsory to provide purchase preference to local suppliers. In a wider decoupling exercise, as part of India’s economic response against China, these firms defined as Class-I local supplier, having local content of ‘equal to or more than 50%’, are the only ones eligible to bid for contracts that has a sufficient domestic capacity.

“Ministry of New & Renewable Energy (MNRE) vide its Order No. 283/22/2019-GRID SOLAR dated 09.02.2021, has inter-alia, prescribed that in public procurement of items in respect of which there is sufficient local capacity and local competition, only Class-I local supplier shall be eligible to bid. Class-I local supplier means a supplier or service provider, whose goods, services or works offered for procurement, has local content equal to or more than 50%. Solar PV modules are one of the products identified as having sufficient local capacity and competition," Singh said in his reply.

India is also turning the screws on Chinese solar power equipment manufacturers, with no Chinese firm been granted approval to feature in the list of approved solar PV models and module manufacturers for government-supported schemes as reported by Mint earlier. Being on the list is compulsory for equipment makers who want to do business in the world’s largest green energy market.

Despite running the world’s largest clean energy programme, India has a domestic manufacturing capacity of only 3 gigawatt (GW) for solar cells and 15GW for solar modules and heavily depends on imports from China. India’s solar equipment space is dominated by Chinese firms such as Trina Solar Ltd, Jinko Solar, ET Solar, Chint Solar and GCL-Poly Energy Holdings Ltd.

There is a growing interest for setting up solar equipment manufacturing facility in India. A recent case in point being US solar panel maker First Solar, Inc.'s plans to invest $684 million to build a 3.3 GW solar module plant in Tamil Nadu. Apart from Mukesh Ambani controlled Reliance Industries Ltd’s plans to set up an integrated solar PV module gigafactory, Vikram Solar recently opened a 1.3GW plant in Tamil Nadu.

Interest from firms such as Bill Gates’ Breakthrough Energy Ventures promoted 1366 Technologies and First Solar comes in the backdrop of the 4,500 crore PLI scheme for solar PV modules that is expected to help India ramp up its domestic manufacturing capacity. It is expected to add 10GW capacity of integrated solar PV manufacturing plants and bring direct investment of around 17,200 crore.

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