Government to float 12 GW solar energy scheme which may help domestic manufacturers

Amidst the US-India WTO dispute a new 12 GW energy scheme which has been deftly crafted to mandate local manufacturing without violating WTO’s trade rules, is in the final stage of approval and will help local industry in India sustain the blow of cheap imports.

The scheme worth INR-8,000 cr will be a significant boost for Indian manufacturers who are also waiting for the imposition of a safeguard duty on solar components. The scheme has already been cleared by the Expenditure Finance Committee which is a part of the Department of Expenditure in the finance industry.

The government can mandate the use of locally manufactured components as a part of the scheme since the power is for the government’s own consumption. The scheme will have an implementation period of four years by 2022, with a minimum manufacturing capacity of 3 GW of solar cells per year which is the current size of the domestic solar cell market in India.

In the recent developments of the safeguard case, the Directorate General of Trade Restrictions recently recommended up to 25% safeguard duty on imports from China and Malaysia for a period of two years.

Initially, in February 2013 the United States requested conversations with India concerning certain measures of India relating to domestic content requirements under National Solar Mission for solar cells and solar modules. The appellate body post listening to both parties plea gave the verdict that DCR measures were inconsistent with WTO non-discrimination obligations.

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