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FICCI cautions against any move to do away with domestic content requirement in solar energy sector

Panchabuta had reported recently, that the government may postpone mandatory use of locally made photovoltaic cells in solar power projects being set up under the national solar mission to speed up projects and allow access to the best-available technology although the move would be a blow to local suppliers such as Moser Baer, Tata BP Solar, KSK Surya and IndoSolar may suffer.

The topic of domestic content has witnessed a lot of debate and there have been strong views from both sides of the table.

The Jawaharlal Nehru National Solar Mission (JNNSM) had finally made a policy decision that the use of domestic content had been made mandatory in the case of modules in its first phase of bidding and this clause is proposed to be made mandatory for photovoltaic cells from next financial year.

According to reports, the secretary ministry of new and renewable energy (MNRE), Deepak Gupta said, “We will consider mandatory clause for photovoltaic cells only after evaluating progress on projects that have been bid in the first round. If need arises, we may postpone its implementation to allow for more global technologies to come into the Indian market.”

Just days after this announcement, according to reports, FICCI has expressed apprehension that any move to do away with the domestic content requirement in the solar energy sector would result in international solar technology companies shying away from investing in the Indian market.

According to the report, the domestic cell manufacturers feel the ministry’s recent statement in a section of the press would preclude India from cashing in on the opportunity to become a manufacturing base for solar energy and move up the value chain by adopting best  technologies in collaboration with global technology leaders.

In a communication to the Secretary, Ministry of New and Renewable Energy (MNRE), FICCI, has stated that the reported statement of the Secretary in the press, viz. “We will consider mandatory clause for photovoltaic cells only after evaluating progress on projects that have been bid in the first round. If  need arises, we may postpone its implementation to allow for more global technologies to come into the Indian market,” would be detrimental to the interests of the domestic industry.  Without domestic content requirement, none of the international players would be interested in creating a manufacturing base in India. Mr. K. Subramanya, Chairman, FICCI Solar Energy Task Force “has stated that as a result of the domestic content requirement, the Indian cell manufacturers have gone ahead and committed investments to the tune of more than US$ 700 million, thereby increasing capacity multifold in the country”.

On one side the domestic manufactures have been asking for a domestic content requirement whereas developers have been asking for the ability to import equipment so that they could discover the best price in the global market.

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