• Indian government has reportedly rejected a plan to support the growth of a local solar equipment manufacturing industry with a new subsidy program
  • The idea was to offer incentives and subsidies for the industry of around 200 billion INR ($3.1 billion)
  • Solar components are already receiving some support under existing laws in India

In what may come as a blow to Indian solar equipment makers, the Indian government is apparently in no mood to approve a 200 billion INR ($3.1 billion) plan to support its PV manufacturers. It has ‘rejected’ a plan that would have supported the growth of the industry in face of competition from Chinese imports with subsidies, reported ET Energyworld from India.

The government was reportedly contemplating such a policy to help the domestic solar manufacturing industry (see $3.1 Billion For India’s PV Industry). But the government is apparently not too keen to go ahead with it, according to a source talking to ET.

The country already offers incentives for 44 categories of electronic products and product components, including solar PV equipment. This comes under the Ministry of Electronics and IT and has been operational since 2012. The 200 billion INR ($3.1 billion) plan would have been different from the current incentives, according to ET.

Protectionist measures have never helping local manufacturing anywhere in the world in the long run. However, dependence on one particular nation for practically all of its supply chain is not a very good situation to be in,  commented market research and consultancy firm Bridge to India.

“Given the multi-faceted implications for project developers, investors, DISCOMs and other stakeholders, we need a larger debate on the role of domestic manufacturing in the sector,” Bridge to India wrote in a recent blog on the subject. Adding, “And instead of considering short-term response to this issue, the Indian government should consider long-term implications for the sector and send a clear policy signal to reduce uncertainty for all stakeholders.”

Indian domestic solar manufacturers have recently filed an anti-dumping petition against Chinese solar imports into India (see Indian Anti-Dumping Petition Against China). China currently holds a 88% market share of solar imports in India.