Solar manufacturers extend support to govt’s Atma Nirbhar Bharat Abhiyan

India’s leading solar manufacturers have extended support to the government’s Atma Nirbhar Bharat Abhiyan and sought the Prime Minister’s (PM’s) support to provide a level-playing field for realising the full potential of the sunrise sector.

Industry players such as Vikram Solar, Webel Solar, and Renewsys in a joint virtual press briefing on Monday also said the government should support manufacturing units located in special economic zones (SEZs).

They said that PM’s announcement last week was a path-breaking initiative, however, certain policy hurdles should be addressed.

“India is planning to achieve an ambitious target of 100 GW of solar deployment by 2022… the 33 GW capacity of solar power deployment so far has been largely attained using imported solar cells and solar panels from China despite India having had enough module manufacturing capacity. Sadly, this has led to the closure of some of the manufacturing units due to very low capacity utilisation,” said Saibaba Vutukuri, chief executive officer (CEO), Vikram Solar.

He said that now is the time to focus on domestic manufacturing, which would help conserve substantial foreign exchange and create at least three to four lakh jobs in the next two to three years.

“The Ministry of Finance’s proposed move to impose basic customs duty (BCD) on solar manufacturers located within the SEZs is likely to impact the viability of these units, and hamper India’s ability to produce indigenously manufactured solar cells and modules,” said the joint press release.

Saibaba Vutukuri alongwith Avinash Hiranandani, global CEO of Renewsys, and S L Agarwal, managing director of Webel Solar, said that the imposition of BCD would be detrimental for units located in the SEZs and in case BCD is levied, manufacturing units located in SEZs would get adversely affected as compared to their counterparts in the Domestic Tariff Area (DTA).

“However, for module manufacturers located in DTAs, they would be required to pay BCD on the value of cell, thereby putting them in an advantageous situation as compared to the manufacturers in the SEZs,” they said.

About 63 per cent of cell manufacturing capacity and 43 per cent of module manufacturing facilities in India are located at the SEZs.

The manufacturers said that if the government plans to levy BCD, it must take the necessary step to protect already made investments by the facilities located in SEZ by taking up the matter with the concerned ministries to provide exemption ensuring that a unit in DTA and SEZ are placed on a similar footing in terms of custom duties and taxation.

“Apart from China, Malaysia and other countries, India is also a significant market for solar cells and modules for Indian firms, whether located in SEZ, EOU, or DTA. No custom tariff was ever envisaged while investing into the manufacturing units in SEZ for clearance to DTA,” said Renewsys’ CEO.

He added that, thus, it is important to protect the existing investment in SEZ, by ensuring that in case SEZ units sell their products in DTA or Indian territory, they are liable to pay custom duties at par with the units in DTA and the custom duty implication on them is limited to an extent of benefits availed in terms of duties and taxes forgone, if any, whenever goods are cleared from SEZ to DTA and not beyond.

According to Webel Solar’s managing director, by doing this the government would ensure that the manufacturing units located in DTA and SEZ are placed on similar footing in terms of custom duties and taxation, which would help India to achieve its RE targets, and also the manufacturing units located in SEZ would be able to export as well as cater to domestic market, hence achieving economies of scale.