+
Building ecosystem for indigenous solar mfg
POWER & RENEWABLE ENERGY

Building ecosystem for indigenous solar mfg

Targeted initiatives and policies for scaling up the domestic solar manufacturing aligned to the RE target of 450 GW by 2030 can help in building a robust ecosystem for indigenous solar manufacturing. Saibaba Vutukuri, CEO, Vikram Solar, identifies a roadmap for achieving it.

Loan subventions. There is a need for a comprehensive policy framework that encompasses tariff and non-tariff barriers, long term financial support and direct incentives to make the domestic solar industry cost-competitive. The finance ministry should consider 5% interest subvention on term loan and working capital, upfront central financial assistance of 30% on capex, increase export incentive from 2% to 8% under Remission of Duties or Taxes on Export Product (RoDTEP) which will aid indigenous solar manufacturing.

 Basic Custom Duty. Further, the industry awaits the implementation of Basic Custom Duty (BCD) with exemption to Special Economic Zone (SEZ) based solar manufacturers and the Production Linked Incentive (PLI) scheme. In our view, bringing down Minimum Alternate Tax (MAT) for units operating in SEZs, extending Section 10 AA of Income Tax Act till 31 March 2022 for SEZ based solar manufacturing unit, preferred interest rate support and priority lending support for manufacturing units, availability of National Clean Energy Fund (NCEF) for expanding solar research and development are critical to augment domestic solar manufacturing.

Tariff barriers. Additionally, the government to consider implementing tariff barriers like BCD/Safeguard Duty/ADD for at least four to five years. Offering capital subsidy of 50% for setting up research and development and quality testing infrastructure within the manufacturing units will help build scale. Also, super-deductions of 200% of the research and development (R&D) expenditure for new and clean solar technology development should be allowed. India already offers super-deduction of 200% of the R&D expenditure in emerging areas such as biotechnology which has led to rapid growth of Indian biotech and pharma companies.

Considering the importance of the electric vehicle (EV) battery ecosystem in a solar-smart nation, special funds to be allocated for this development. Such a move will not only encourage economic recovery amidst the pandemic, but will also provide an enabling ecosystem to make India the global manufacturing hub for solar. 

Author: Saibaba Vutukuri is CEO of Vikram Solar.

Targeted initiatives and policies for scaling up the domestic solar manufacturing aligned to the RE target of 450 GW by 2030 can help in building a robust ecosystem for indigenous solar manufacturing. Saibaba Vutukuri, CEO, Vikram Solar, identifies a roadmap for achieving it.Loan subventions. There is a need for a comprehensive policy framework that encompasses tariff and non-tariff barriers, long term financial support and direct incentives to make the domestic solar industry cost-competitive. The finance ministry should consider 5% interest subvention on term loan and working capital, upfront central financial assistance of 30% on capex, increase export incentive from 2% to 8% under Remission of Duties or Taxes on Export Product (RoDTEP) which will aid indigenous solar manufacturing. Basic Custom Duty. Further, the industry awaits the implementation of Basic Custom Duty (BCD) with exemption to Special Economic Zone (SEZ) based solar manufacturers and the Production Linked Incentive (PLI) scheme. In our view, bringing down Minimum Alternate Tax (MAT) for units operating in SEZs, extending Section 10 AA of Income Tax Act till 31 March 2022 for SEZ based solar manufacturing unit, preferred interest rate support and priority lending support for manufacturing units, availability of National Clean Energy Fund (NCEF) for expanding solar research and development are critical to augment domestic solar manufacturing. Tariff barriers. Additionally, the government to consider implementing tariff barriers like BCD/Safeguard Duty/ADD for at least four to five years. Offering capital subsidy of 50% for setting up research and development and quality testing infrastructure within the manufacturing units will help build scale. Also, super-deductions of 200% of the research and development (R&D) expenditure for new and clean solar technology development should be allowed. India already offers super-deduction of 200% of the R&D expenditure in emerging areas such as biotechnology which has led to rapid growth of Indian biotech and pharma companies.Considering the importance of the electric vehicle (EV) battery ecosystem in a solar-smart nation, special funds to be allocated for this development. Such a move will not only encourage economic recovery amidst the pandemic, but will also provide an enabling ecosystem to make India the global manufacturing hub for solar.  Author: Saibaba Vutukuri is CEO of Vikram Solar.

Next Story
Infrastructure Urban

Budget Proposal Aims to Boost Investments

The recent budget proposal has introduced measures designed to promote investments and generate job opportunities across various industries, as reported by the Economic Times. This initiative seeks to stimulate economic activity and strengthen the country's growth trajectory by encouraging both domestic and foreign investments. Key aspects of the proposal include targeted incentives for sectors poised for expansion, such as renewable energy, infrastructure, and technology. The government aims to create a more favorable investment climate by offering tax benefits, subsidies, and streamlined reg..

Next Story
Infrastructure Urban

Indian Financial System Resilient Amidst Challenges

The Reserve Bank of India (RBI) Deputy Governor M. Rajeshwar Rao has emphasized the robust nature of the Indian financial system despite global economic headwinds, according to Economic Times. Rao?s comments reflect confidence in the stability and resilience of India's financial sector amidst a backdrop of international economic uncertainties and financial volatility. Rao highlighted that India?s financial system is well-equipped to handle external shocks due to its solid regulatory framework and prudent risk management practices. The country?s banking sector has demonstrated resilience throug..

Next Story
Infrastructure Energy

SC Allows State Tax on Mines, Minerals

Opposition leaders have welcomed the Supreme Court's recent decision permitting states to levy taxes on mines and mineral-bearing lands, as reported. The ruling is seen as a significant victory for state governments seeking greater control and revenue from natural resource extraction within their jurisdictions. The Supreme Court?s decision empowers states to impose taxes on mining operations and mineral-rich lands, which could enhance their revenue streams and enable better management of local resources. This move is particularly important for states with substantial mineral resources, as it a..

Talk to us?