India has approved a PLI Scheme to strengthen the country's solar cell manufacturing sector.
India has approved a Production Linked Incentive (PLI) Scheme—National Program on High Efficiency Solar PV Modules—with an outlay of Rs. 4,500 crore, to strengthen the country’s solar cell manufacturing sector. The Scheme has provisions for supporting setting up of integrated manufacturing units of high efficiency solar PV modules by providing PLI on sales of such solar PV modules.
Solar PV cells and modules are already being manufactured in the country. In order to further enhance domestic manufacturing of solar PV cells and modules, the Government has taken the following steps:
Modified Special Incentive Package Scheme (M-SIPS) Scheme of Ministry of Electronics & Information Technology: The scheme mainly provides subsidy for capital expenditure – 20% for investments in Special Economic Zones (SEZs) and 25% in non-SEZs.
Preference to ‘Make in India’ in Public Procurement in Renewable Energy Sector: Ministry of New & Renewable Energy (MNRE) vide its Order No. 283/22/2019-GRID SOLAR, 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.
Domestic Content Requirement (DCR): Under some of the current schemes of the Ministry of New & Renewable Energy (MNRE), namely CPSU Scheme Phase-II, PM-KUSUM and Gridconnected Rooftop Solar Programme Phase-II, wherein government subsidy is given, it has been mandated to source solar PV cells and modules from domestic sources.
Imposition of Basic Customs Duty on import of solar PV cells and modules: The Government has announced imposition of Basic Customs Duty (BCD) on import of solar PV cells and modules with effect from April 1, 2022.
Discontinuation of Customs Duty Concession benefits: Ministry of Finance (Department of Revenue) vide its Gazette Notification No. 7/2021-Customs, has rescinded its earlier Notification No. 1/2011-Customs, thereby withdrawing the benefit of concessional customs duty on the items imported for initial setting up of the solar power projects with effect from February 2, 2021.
The Scheme targets direct employment to 30,000 people and indirect jobs to 1.2 lakh people. It aims for an additional 10,000 MW of integrated domestic manufacturing capacity of high efficiency solar PV modules with an investment of around Rs.17,200 crore.