A recent media report indicates that the Reserve Bank of India (RBI) is contemplating the inclusion of solar panel manufacturing in the priority sector lending category, aiming to boost the growth of renewable energy. A decision in this regard is expected within the next two to three months after thorough discussions with stakeholders. Banks have advocated for providing the priority sector tag to solar panel manufacturers. The Ministry of Renewable Energy is also considering modifications to the Production-Linked Incentive (PLI) scheme to support this sector.
Pioneering Changes in PLI Scheme to Boost Solar Industry
Meetings have taken place over the last two months between officials from the Ministry of Finance and Renewable Energy, and representatives from the banking sector. Discussions encompassed funding matters concerning solar photovoltaic manufacturing companies, and banks have put forward recommendations in this regard.
Furthermore, the Solar Association has shed light on additional issues, including the impact of imports from South-East Asian countries under Free Trade Agreements (FTA) on domestic manufacturers. They highlight a significant 48% increase in solar imports from FTA-signed countries in the past 2-3 months. Notably, solar module imports from China have decreased by around 80% or $200 million in the first half of 2023 due to imposed tariffs, leading to an increase in India’s solar module manufacturing capacity. The Solar Association emphasizes the need for policy adjustments to support domestic production and tackle challenges posed by imports.