India will impose restrictions on the import of solar equipment and
encourage foreign companies to establish local facilities, minister
for new and renewable energy, Farooq Abdullah said.
The move has come in response to vigorous demands from domestic
manufacturers of solar cells and panels, who allege that countries
such as China are “dumping” cheap solar products in India.
Abdullah was speaking at a conference organised by The Associated
Chambers of Commerce and Industry of India (ASSOCHAM).
The move is likely to come as a blow to foreign companies eyeing
India’s ambitious 10-year, 20 GW solar project. The project, as
envisioned, one of the largest coordinated deployment of solar power
generation equipment in the world.
In the context of drying government sops for the solar industry in the
traditional markets like Japan, Germany and Spain, global
manufacturers had been looking at upcoming markets such as India and China.
However, the Indian government too is keen on not becoming dependent
on foreign countries and corporations for what is widely seen as the
next source of universal energy. India is one of the world’s biggest
importers and consumers of hydrocarbons, keen to meet its growing energy demand.
India does not have any manufacturing capacity for the most crucial
item in the solar-equipment supply chain — polysilica or the black
crystal that is embedded in the panels. It does, however, have players
who import the silica wafers and punch them into solar cells and panels.
The government is keen to have not just the ‘assemblers’, but also the
manufacturers based in India.
As such, Abdullah said, foreign companies are free to tap the Indian
market but only after they set up manufacturing and research and
development facilities in the country.
During its first phase of the National Solar Mission, 1,100 MW
capacity is envisaged by 2013. Nearly all of this capacity has been
contracted out to private companies and about 170 MW has been already
put in place, according to the government.
In the second phase, additional capacity of 10,000 MW capacity for
various off-grid applications has been sanctioned for the 2013-17
period.
“The sector will require an investment of 20 billion dollars by 2017,”
Abdullah said.