India’s Cabinet Committee on Economic Affairs (CCEA) has approved a proposal for state-run generators to set up 12 GW of solar projects using domestically-made equipment over the next four years.
Under the second phase of the Central Public Sector Undertaking Scheme – overseen by the Ministry of New and Renewable Energy – the government will provide viability gap funding support of Rs8,580 crore through central and state entities for the projects, which would be expected to generate investment of Rs48,000 crore and support Indian manufacturing plants, the CCEA said.
“The scheme will mandate use of both solar photovoltaic cells and modules manufactured domestically, as per specifications and testing requirements fixed by the Ministry of New and Renewable Energy,” a CCEA statement added.
The cabinet committee said the proposal will provide direct employment to around 60,000 people for a year in the pre-commissioning activities and construction phase, and around 18,000 for 25 years in operations and maintenance. In addition, more than 120,000 additional employment opportunities will be created through involvement in setting up solar projects and in cell and module manufacturing, said the committee.
India has had several run-ins with the World Trade Organization over its efforts to mandate local equipment. In September 2016, the WTO’s highest court – the Appellate Body – upheld a ruling that India violated several core provisions relating to national treatment and trade-related investment measures. Under the national treatment rules, governments must treat imported products on a par with domestically manufactured ones.
However, PV industry experts believe if the government is setting up solar projects itself, without inviting competitive bids, it can mandate the use of Indian equipment.