Lok Sabha Question No. 1664 (UNSTARRED), answered on 2019-11-28
Subject: Production of Solar Hardware
Ministry: NEW AND RENEWABLE ENERGY
Asked by: Uttam Kumar Nalamada Reddy

## GOVERNMENT OF INDIA MINISTRY OF NEW AND RENEWABLE ENERGY

## LOKSABHA

## UNSTARRED QUESTION NO 1664

TO BE ANSWERED ON 28/11/2019

## PRODUCTION OF SOLAR HARDWARE

## 1664. SHRI UTTAM KUMAR REDDY NALAMADA

Will the Minister of NEW AND RENEWABLE ENERGY be pleased to state:

- (a) the reasons for dependence on China for production of solar hardware;
- (b) the details of solar hardware imports during the last five years;
- (c) the number of solar panel production facilities in India;
- (d) whether any measures are being taken to incentivise the production of solar hardware in India; and
- (e)  if so, the details thereof and if not, the reasons therefor?

## ANSWER

THE MINISTER OF STATE (I/C) FOR NEW & RENEWABLE ENERGY,  POWER and MoS for  SKILL DEVELOPMENT AND ENTREPRENEURSHIP

## (SHRI R. K. SINGH)

- (a)  Presently,  the  domestic  solar  cell  and  module  manufacturers  have  the  following disadvantages:
- (i) The country does not have a manufacturing base for Polysilicon, Ingots and wafers, the upstream  stages  of  Solar  Photovoltaic  (PV)  manufacturing  chain,  which  is  energy  & capital intensive process.
- (ii) Lack of integrated set up, economies of scale & modern technology resulting in higher cost of production.
- (iii) High cost of land and electricity, low capacity utilization, high cost of financing, and lack of skilled workforce.

The  above  factors  result  in  domestic  solar  products  being  more  expensive  than  those imported from China.

- (b)  Based  on  the  information  available  on  the  website  of  Export  Import  Data  Bank  of Department of Commerce, the details of import of solar cells/photovoltaic cells whether or not assembled in module/ panel, under the Customs Tariff Head (CTH) 85414011, are given in Annexure-I.
- (c)  As  per  the  data  provided  by  solar  PV  manufacturers,  the  total  solar  PV  panel manufacturing capacity in the country is around 10 GW.
- (d)  &  (e)  The  production  of  solar  PV  cells  and  modules  in  India  is  supported  by  the Government of India by way of following initiatives:

(i)    Domestic  manufacturing  of  solar  cells  and  panels  in  India  is  being  supported  by  the Government  of  India  through  Modified  Special  Incentive  Package  Scheme  (M-SIPS)  of Ministry of Electronics & Information Technology. The scheme, inter alia, provides for:

-  20-25% subsidy for investments  in  capital  expenditure  for  setting  up  of  the manufacturing facility; and
-  Reimbursement  of  countervailing  Duty  (CVD)/  Excise  Duty  for  capital equipment for the units outside Special Economic Zone (SEZ).

(ii)    Based  on  the  final  findings  of  Directorate  General  of  Trade  Remedies  (DGTR)  in investigations concerning imposition of Safeguard Duty on import of solar cells/ modules, the Government,  through  notification  no.  01/2018-Customs  (SG)  dated  30 th July,  2018,  have imposed  Safeguard  duty  on  import  of  solar  cells  whether  or  not  assembled  in modules  or panels, as follows:

-  twenty  five  percent,  ad  valorem  minus  anti-dumping  duty  payable,  if  any,  when imported  during  the  period  from  30 th July,  2018  to  29 th July,  2019  (both  days inclusive);
-  twenty  percent,  ad  valorem  minus  anti-dumping  duty  payable,  if  any,  when imported during the period from 30 th July,  2019 to 29 th January, 2020 (both days inclusive);
-  fifteen  percent,  ad  valorem  minus  anti-dumping  duty  payable,  if  any,  when imported during the period from 30 th January, 2020 to 29 th July,  2020 (both days inclusive);

However, nothing contained in the notification dated 30 th July, 2018, mentioned above shall apply  to  imports  of  subject  goods  from  countries  notified  as  developing  countries  vide notification  no.  19/2016-Customs  (N.T.)  dated  5 th February,  2016,  except  China  PR,  and Malaysia.

(iii)  Government  have  approved  a  Scheme  for  setting  up  of  solar  PV  power  plants  by Government  Producers  [Central  Public  Sector  Undertakings  (CPSUs)/  State  Public  Sector Undertakings  (SPSUs)/  Government  Organizations,  etc.],  as  per  extant  Guidelines,  in  a World Trade Organization (WTO) compliant manner, using domestically manufactured solar PV cells and modules to encourage Make in India in solar PV manufacturing sector.

(iv)  Further, solar PV power projects being implemented under other Schemes of Ministry of New & Renewable Energy (MNRE) like PM- KUSUM and Grid-Connected Rooftop Solar Programme  Phase-II  are  also  mandated  to  source  their  requirement  of  solar  PV  cells  and modules from domestic sources, as per extant Guidelines, in a WTO compliant manner.

(v) The Ministry of New & Renewable Energy (MNRE) vide its O.M. No. 146/57/2018-P&C dated 11.12.2018 regarding 'Implementation of Public Procurement (Preference to Make in India) Order for Renewable Energy sector' has stipulated that apart from civil construction, preference  shall  be  provided  by  Central  Ministries/Department  and  Central  PSUs  to domestically manufactured/produced products such as solar PV  modules and other components  such  as  inverters,  etc.  for  Grid  connected  solar  power  projects.  Minimum Percentage  of  local  content  required  is  100%  in  case  of  solar  modules  and  40%  for  other components such as inverter, etc.

(vi)  The Solar Energy Corporation of India Limited (SECI)) has concluded bidding for a tender for setting up of Solar PV Power plants linked to setting up of Solar PV Manufacturing facilities.

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ANNEXURE-I

Annexure referred in reply to part (b) of Lok Sabha Unstarred Question No. 1664 on 'Production of Solar Hardware' for reply on 28.11.2019 .

| Financial Year                                                                                                                                | Financial Year       |   2014- 15 (in Million US $) |   2015- 16 (in Million US $) |   2016- 17 (in Million US $) |   2017- 18 (in Million US $) |   2018- 19 (in Million US $) |   2019-20 (till Sep 2019) (Provisional) (in Million US $) |
|-----------------------------------------------------------------------------------------------------------------------------------------------|----------------------|------------------------------|------------------------------|------------------------------|------------------------------|------------------------------|-----------------------------------------------------------|
| Value of Solar cells/ photovoltaic cells whether or not assembled in module/panel, imported in India under Customs Tariff Head (CTH) 85414011 | From China           |                          603 |                         1960 |                         2817 |                         3419 |                         1694 |                                                       731 |
| Value of Solar cells/ photovoltaic cells whether or not assembled in module/panel, imported in India under Customs Tariff Head (CTH) 85414011 | From Other Countries |                          218 |                          385 |                          380 |                          419 |                          466 |                                                       266 |
| Value of Solar cells/ photovoltaic cells whether or not assembled in module/panel, imported in India under Customs Tariff Head (CTH) 85414011 | Total import         |                          821 |                         2345 |                         3197 |                         3838 |                         2160 |                                                       997 |