Government re-imposes import restrictions on solar modules from April 1 to boost domestic manufacturing

The government has re-imposed restrictions on import of solar modules. The move was taken to boost local manufacturing. Imports were allowed till March 31st, 2024 based on industry demand and the fact that not enough domestic manufacturers are there to meet the demand. It had earlier exempted solar projects commissioned by March 31, from the mandatory requirement of procuring solar modules from the approved list of models and manufacturers for 2023-24.

The government mandate of 2021 says solar project developers will have to buy modules from the approved list as a non-tariff barrier to boost domestic manufacturing. The government is now bringing back the order as it is of the view that domestic capacities are now ready to meet the demand and need to be supported, said a government official.

Government believes domestic manufacturing capacities are projected to grow significantly by 2026 Earlier in February, the government had said that while the approved list of model manufacturers, restriction would restart from April 1. However, open access and captive consumption projects would be exempt. Exemption was also given to projects in the advanced stage of construction and had opened a line of credit or placed orders before March end for modules. However, the order was withheld, and the latest order on re-imposition of the restriction did not mention any of these exemptions.

According to Mercom India research, as on December 2023, India's cumulative solar module manufacturing capacity has reached 64.5GW, and solar cell manufacturing capacity totalled 5.8GW. Mercom India report says India's domestic module manufacturing capacity is projected to surpass 150GW, and cell manufacturing capacity is expected to reach 75GW by 2026.