Cabinet allocates ₹10,738 cr for solar modules, ACs & LED lights

Continuing with its effort to ramp up domestic manufacturing, the Cabinet on Wednesday cleared two more production-linked incentive schemes — for high-efficiency solar photo-voltaic modules and white goods — with an outlay of ₹10,738 crore for five years.

For the white goods segment — air conditioners and LED lights — the scheme has been approved with an outlay of ₹6,238 crore, while the PLI scheme for the high-efficiency solar PV modules gets ₹4,500 crore.

Addressing mediapersons after the Cabinet meeting, Commerce and Industry Minister Piyush Goyal said, “DIPPT and the MNRE will come out with detailed guidelines about the implementation of the PLI schemes.”

“The solar PLI scheme will lead to an annual addition of around 10,000 MW in the country’s manufacturing capacity and spur direct investments of around ₹17,200 crore,” Goyal added.

To make India globally competitive in manufacturing ACs and LED lights segments, the government said the PLI scheme will lead to incremental investments of ₹7,920 crore and incremental production worth ₹1,68,000 crore. It is expected to create four lakh direct and indirect jobs. Incentives shall be open to companies making brownfield or greenfield investments. The scheme will offer incentives of 4-6 per cent on incremental sales of goods manufactured in India for five years.

“One of the key pillars to drive up manufacturing and exports is backward integration. As component manufacturing is a key beneficiary of the new policy, indigenous AC manufacturing will get a fillip,” said Manish Sharma, President & CEO, Panasonic India & South Asia and Chair of FICCI’s Electronics & Manufacturing Committee.

Bidding process

The government said that solar PV manufacturers will be selected through a transparent competitive bidding process to get benefits under the scheme. “PLI will be disbursed for 5 years post commissioning of solar PV manufacturing plants, on sales of high efficiency solar PV modules. Manufacturers will be rewarded for higher efficiencies of solar PV modules and also for sourcing material from the domestic market...,” a statement added.

“Incentives for high-efficiency solar module manufacturing have been a long-standing ask,” said Pranav R Mehta, National Solar Energy Federation of India. “We will be working closely with international/national investors and Indian manufacturers to facilitate investments to scale up manufacturing,” he said.