A more evidence-based and integrated approach can simplify India’s pursuit of self-reliance in solar manufacturing. Discuss (200 Words)
Refer - Financial Express
Enrich the answer from other sources, if the question demands.
IAS Parliament 3 years
KEY POINTS
· The MNRE has announced plans to levy basic customs duties (BCD) on imports of solar PV modules and cells to help reduce India’s reliance on external supply and promote domestic solar manufacturing.
· A CEEW-CEF analysis indicates it is possible for India to achieve greater self-reliance in solar manufacturing through time-bound application of BCD.
· China’s vertically integrated ecosystem provides module-makers cheaper access to raw materials, whereas Indian firms rely on imports in the absence of cost-competitive domestic options.
· Higher unit labour and overheads in India account for the remainder of the price gap.
· Rationalising Basic Customs Duty: Based on the foregoing, BCD of 20%, rather than the excessive 40%, on modules may be sufficient to bridge the price gap between domestically-produced and imported modules.
· Other cost-reducing measures, such as manufacturing parks offering low-cost logistics and electricity, or the proposed PLI scheme, can further bolster competitiveness and reduce the required duty amount.
· As domestic production scales up, duties can be tapered down and subsequently withdrawn over a pre-defined time frame. We estimate duty support over a ten-year period is sufficient for Indian industry to achieve competitiveness.
