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US once again voices concern over India’s solar import restriction

As Panchabuta had reported as early as December,2010, the U.S. was aggressively trying to push  India to lift solar import restrictions on Jawaharlal Nehru National Solar Mission.

Since that lobbying by the US, the government had announced that it 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.

Just days after this, FICCI had cautioned against any move to do away with domestic content requirement in solar energy sector.

This immediately led the ministry to issue a clarification, as reported by Panchabuta, that stated, “Under the Jawaharlal Nehru National Solar Mission, the Government had announced a policy to introduce domestic content wherein 30% domestic content is mandatory for the solar thermal power projects in the first phase of the Mission. Solar Photovoltaic (PV) grid power projects are to be selected in two stages. In the first stage 150 MW capacity projects are being selected, where the crystalline silicon modules should be manufactured in the country. However, for the second stage of selection of about 300 MW capacity projects, it is mandatory to use domestic solar cells and modules. There is no move to defer this policy. “

In November last year, US expressed concern  over certain Indian policies that it says inhibit investments by foreign firms, keen on collaboration with local companies, in renewable energy and clean technologies.

Such measures, aimed at protecting specialized domestic industries, would be harmful in the long term, said Francisco Sanchez, US undersecretary for international trade in the department of commerce.

“There is clearly a lot of opportunity for collaboration. We encourage India to address concerns that many have about its business environment,” Sanchez told a business meeting organized by the Confederation of Indian Industry in New Delhi on Monday. “In particular, there is increasing concern about some recent action that seems to tilt the playing field here in India away from US businesses and other foreign firms.”

 Last month the Indian government had said it has no objections to imports of low-priced Chinese  solar cells as long as they meet prescribed quality standards.

This comes as a setback to domestic manufacturers battling cheaper Chinese imports. Last week, the government rejected a plea of domestic players seeking imposition of import duty on finished solar equipment.

“The market will always bend towards the products which are low-priced. But, yes the quality matters,” said Tarun Kapoor, joint secretary, ministry of new and renewable energy. The Indian government’s stand is in contrast with the  US policy, which has taken China to the  World Trade Organisation over dumping of solar cells and panels.

According to reports, the United States Under Secretary Francisco Sanchez on Monday expressed concern over the solar import restrictions by India and said any restriction that will have the effect on limiting the best technology to India is of concern to America.

Reacting to a query on government policy wherein 30 per cent domestic content is mandatory for the solar thermal power projects in the first phase of the Jawaharlal Nehru National Solar Mission, he said, “We are believers in an open economy and any restrictions that have the effect on limiting the best technology from coming into your country is of concern to us. We believe that’s not the best way to foster a local industry.”

Given the constant pressure on the government against import restrictions, the approach by the ministry seems to have changed with the recent announcement that the thinking in the Ministry of New and Renewable Energy  is for the newly set up Solar Energy Corporation to put up a 1,000-MW solar park in the country. The report further adds that, according to industry sources, the MNRE was thinking in terms of mandating local content for projects that would be set up in the park, while those come up elsewhere would not have any such restrictions. Asked about this, Mr Tarun Kapur, Joint Secretary, Ministry of New and Renewable Energy, just said that various ideas were being discussed in the Ministry.

One comment

  1. Its a fantastic news, can we have Secretary Kapoor confirm this on MNRE / NVVN website?

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