Impact of ‘Make in India’ Initiative on Solar Energy in India

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Make in India initiative, announced by Hon’ble Prime Minister, Shri Narendra Modi, focuses on manufacturing, new investment, more employment opportunities, promising manufacturing growth and economic revolution for India. The initiative gave results as expected, bringing in revenue, initiating technological growth and industrial development in the solar sector.

Initiative Projections

By investing in manufacturing, world leaders like US and China have fared well. These countries have successfully created jobs, facilitated R&D growth and build in capacity in manufacturing raw materials in a value chain. Make in India was expected to walk on the same trajectory through tried and tested strategies. The government of India took certain steps in order to make this path more illuminating like extending benefits to the solar sector, establishing Special Economic Zones and allowing 100% Foreign Direct Investment (FDI), which made a huge impact on renewable energy generation.

It was presumed that Make in India will enable India to set up a long solar panel installation manufacturing industry, satisfying domestic demand and earning through exports, similar to US and China. With Make in India running at top speed, it was possible for India to move past the dominating countries in the solar power sector. However, various obstacles have led to a different result.

Make in India – Current Stand

Over the years, statistics (5 GW in 2015 to 10 GW in 2016 ~24 GW in 2018) tells us that solar is a promising sector to invest in. Hence, Make in India focussing on solar energy sector would have seen positive results on India’s economic, industrial and social environment. However, reality strikes a different note. In place of solar panel manufacturing, India spent $3.8 billion in FY 17-18 on solar module import. Consequently, it has limited the progress in manufacturing capacity. Hence, in today’s scenario, foreign suppliers are dominating the market by claiming 80% share.

Furthermore, 25% safeguard duty imposition on SEZ based solar panel manufacturers in India, results in limiting solar installation growth and pushes solar manufacturers out of the market as the product gets costlier than before. Adding to the obstacles, cancellation of projects, continuous drops in solar tariff and lack of green energy distribution is keeping the investors at bay, in turn making it harder for Make in India to achieve its goals.

Future Path

Pertaining to the reasons listed above, it is evident that although Make in India had the potential to amplify lucrative sectors, it has failed to do so. However, it is still possible to make this initiative a success by reforming various policies and developing R&D facilities.

Once India reduces its solar import dependency, the manufacturing industry will witness a boost.

It is essential to realize that solar is the future of world’s energy and in order to make ‘Make in India’ initiative a success, we have to take an aggressive stand in manufacturing solar panels. This will, in turn, lead to the goal of India overtaking other leaders in renewable source expansion by 2022.

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