The Ministry of New and Renewable Energy (MNRE) that is responsible for mainly responsible for research and development and coordination in renewable energy sources has urged states to set up renewable energy equipment manufacturing parks.
The ministry has urged the states to set up manufacturing parks to meet domestic demand as well as make India a global production hub.
After the coronavirus outbreak in China many international firms have started moving out of the country and started looking for alternatives. For instance, Japanese government recently proposed to allot 220 billion yen ($2 billion) to firms for shifting production back to Japan and 23.5 billion yen to companies seeking to move manufacturing base to other countries.
Looking into the current scenario MNRE has offered many incentives to states to set up such parks at a time when numerous international firms are looking to move their production base out of China after the COVID-19 outbreak.
The ministry in a statement said “MNRE has initiated action in big way towards setting up new hubs for manufacturing renewable energy equipment in the country to meet both domestic and also cater to global demand.”
With aim to propel domestic manufacturing and open door to ample opportunities the ministry has written to various state governments and port authorities to identify land parcels of 50-500 acres for setting up such parks.
Tuticorin Port Trust, governments of Madhya Pradesh and Odisha have already expressed their interest in setting up RE equipment manufacturing parks.
Secretary, MNRE, Anand Kumar held meetings with RE companies last week. The ministry has also got in touch with trade commissioners / representatives of various countries inviting them to invest in this promising sector in India.
The MNRE Secretary addressed the US India Strategic Partnership Forum earlier this week through a webinar and sought collaboration and investment by US firms.
Silicon ingots, silicon wafers, solar cells, solar modules, wind power equipment and ancillary items like back sheet, glass, steel frames, inverters and batteries are expected to be manufactured in these facilities. The hubs will also export equipment and services in the RE sector.
On the wind equipment manufacturing front India currently has around 10 GW of capacity. In case of solar cells and modules, India imports about 85 per cent of its requirement.
The government has already levied basic customs duty on these goods for protecting the domestic solar manufacturing industry.
The MNRE said at a time when many companies are shifting their base from China, it is time for India to bring policy changes for facilitating manufacturing in the country.
In tune with this, the MNRE has set up a Renewable Energy Industry Facilitation and Promotion Board to facilitate investment in the sector.
The ministry has strengthened the clauses in Power Purchase Agreements (PPAs) to boost investor confidence.
The three power and RE sector NBFCs — PFC, REC and IREDA — have reduced their repayment charges to 2 per cent for enhancing the funds available for new projects.
The IREDA has also brought out a new scheme for project specific funding to promote new RE projects in India, it added.