India’s renewable energy ministry plans to introduce more fiscal incentives to boost local manufacturing of solar power equipment, according to a senior ministry official.
The incentives will be for a designated year during which investment by companies in the solar sector reaches a certain threshold that’s yet to be decided, A.N. Srivastava, director of the federal solar program at the ministry, said at a conference.
The ministry has recommended capital grants and equity participation of up to 20 per cent in equipment manufacturers if they’re located in special economic zones, or a more than 25 per cent extension of countervailing duties to companies that are not located in special economic zones, he said.
Countervailing duties are taxes levied by a country on imported goods that are subsidised by the exporting country, to offset the effect of those subsidies.
The ministry has also recommended soft loans at about 5 per cent interest to “units engaged in the manufacturing of smaller components and are not covered under provisions of capital subsidy,” Srivastava said.
Foreign solar companies have said India’s restrictions on imports of solar power technology are protectionist in nature and make it difficult for them to enter one of the world’s fastest-growing solar energy markets.
India’s solar power program, which plans to add 20,000 megawatts of solar power capacity to its grid by 2020, aims to create a large domestic manufacturing base.