Raj Kumar Singh, Union Minister of Power and New and Renewable Energy (Independent Charge) has emphasised that for promoting Make in India, reducing import dependency and creating jobs it was essential that developers in the transmission, thermal, hydro, distribution, renewables joined the national campaign of Aatmanirbhar Bharat and wholeheartedly adopt the Make in India policy of the Central Government.
The Power Minister pointed out that from the data on item-wise quantum of imports in power sector given by Directorate General of Commercial Intelligence (DGCI), Department of Commerce it is seen that many types of equipment like transmission line towers, conductors, industrial electronics, capacitors, transformers, cables and insulators and fittings, etc., in respect of which domestic manufacturing capacity exists, are still being imported. It was emphasised that.
The minister made these observations while interacting with developers of generation and transmission projects in the power and renewable energy sector through video conferencing on Tuesday.
Singh pointed out that power was a sensitive and strategically important sector, like all communications, manufacturing, data management and all essential services depend on the power supply and any malware may bring down the system. Therefore, Aatmanirbhar Bharat had a much higher level of significance for the power sector. Accordingly, he urged all the developers to pledge to avoid the import of any equipment, materials or goods in respect of which there was sufficient domestic capacity. In respect of goods and services wherein domestic capacity was not available, it should be allowed only for a fixed timeframe of two to three years during which indigenous manufacturing of these items would be developed by an enabling policy, tax incentives, start-up ecosystem, vendor development and R&D support so that all these items get domestically manufactured.
Till such time goods so imported shall be tested in Indian laboratories for adhering to Indian standards and also to check the presence of malware.
Control on Imports
In respect of equipment and items required to be imported, their import from prior reference countries should be done only after obtaining prior approval of the Ministry of Power and MNRE.
The minister further informed the meeting of the ministry’s proposal to impose basic customs duty (BCD) beginning August 2020 on solar modules, solar cells and solar inverters. He said that a clear trajectory of BCD would be declared so that there was no uncertainty about government policy.
Further, the approved list of models and manufacturers in respect of renewable energy will be made effective from October 1, as was declared earlier. This would ensure that all solar power projects which are bid out as per the standard bidding guidelines will be required to procure solar cells and solar modules and other equipment from manufacturers figuring in the approved list. In addition, financing from Power Finance Corporation (PFC), Rural Electrification Corporation (REC) and Indian Renewable Energy Development Agency (IREDA) would be structured in such a manner that lower rates of interest will be levied on the developers who will use domestically manufactured equipment.
Constitution of FDI and Project Development Cells
Singh also mentioned the recent constitution of FDI cell and Project Development cells in the ministries of Power and New and Renewable Energy. The FDI cell will vet proposals for investment from countries that share borders with India. The Project Development Cell will hand-hold investible projects to accelerate the process of investment. He further informed the meeting that the practice of issuing concessional custom certificates for certain import items in the renewable energy sector will be discontinued from a date that will be specified separately.
During the interaction with the minister, the developers made important suggestions to strengthen the entire value chain of the manufacturing of power sector equipment in India, which, inter-alia, include the need for policy certainty, suitable regime for facilitating the import of capital goods required for manufacturing of power equipment and availability of finance and power to manufacturers at competitive rates. They also emphasised the need for clarity on the new and old investments, encouraging the R&D efforts and maintaining the sanctity of contracts.
Some of the developers also emphasised that the import of critical equipment required for maintenance and overhaul of the existing projects needs to be allowed till such time the domestic manufacturing capacity for the same is put in place.
The developers from generation and transmission side, including developers in the renewable energy sector and also industry associations like the Confederation of Indian Industry (CII), Federation of Indian Chambers of Commerce and Industry (FICCI) and PHD Chamber of Commerce as well as solar and wind manufacturers echoed with enthusiasm their pledge to contribute to the domestic manufacturing by unanimously and wholeheartedly supporting the idea of ‘Make in India’ and ‘Aatmanirbhar Bharat’ to reduce the dependency on imports and agreed to abide by the pledge suggested by the minister.
The minister assured the participants that suggestions made in respect of existing projects, availability of easy credit, etc., will be carefully examined. He directed secretaries of power and MNRE to look into the concerns of the industry participants.