SEZ Board meeting: Mundra Solar’s proposal for approval extension deferred, Wockhardt’s granted

The Board of Approval for SEZs has deferred a request for extension of approval made by Mundra Solar — an SEZ unit that manufactures solar cells and modules in Adani Ports and SEZ (APSEZ) at Mundra, Gujarat — and has asked the Development Commissioner (DC) of the zone to prepare a detailed report based on observations of the Revenue Department.

Pharmaceutical major Wockhardt, on the other hand, got a one-year extension of approval, up to February 24, 2022, which it had sought for its unit at Wockhardt Infrastructure Development SEZ in Aurangabad, as per the minutes of the BoA meeting held on March 18.

“Wockhardt’s approval came easy as it has made capital investments in the project and is only awaiting regulatory approval,” a source tracking the developments told BusinessLine.

In the case of Mundra Solar, though four extensions of approvals were granted to the unit in the past, it has not initiated any physical construction activity on-ground apart from obtaining environment clearance, the DCof APSEZ pointed out in its submission for the agenda for the meeting.

“It is pertinent to note that the unit vide letter dated October 16, 2019, had applied for exit from SEZ and subsequently withdrew their proposal for exit from SEZ vide letter dated January 8, 2021, thereby willing to continue in SEZ formation,” the agenda for the meeting stated. The proposed investment in the unit is estimated at ₹2,860.85 crore.

The letter of approval (LoA) for the zone had expired last year. “The extension was applied after the company withdrew its proposal for exit from the SEZ early this year. The Department of Revenue, therefore, wants a more detailed report on the unit and its plans before it decides on whether it merits an extension,” the source said.

Mundra Solar developers, in its proposal for a two-year extension for its LoA (up to April 2022), explained that its technical team is now working on advanced direct wafering technology, which will help improve the operational cost of wafer manufacturing. This would make the project more viable in terms of finance and reliability.

Solar cell customs duty

As India is set to impose a basic customs duty of 25 per cent on imported solar PV cells and 40 per cent on imported solar PV modules with effect from April 1, 2022, domestic manufacturing is likely to get more competitive.

The DC recommended to the BoA that as it was an environment-friendly project, the request was worth considering. “A decision on the matter will now be taken by the BoA only in a subsequent meeting after the DC submits more details,” the source said.

Wockhardt’s proposed inhaler and nasal dosage manufacturing unit at the Aurangabad SEZ has received a year’s extension from the BoA. The unit had said that the project was yet to take off because of a delay in regulatory approvals from agencies such as the US Food and Drug Administration (USFDA), on account of the Covid-19 pandemic.

The BoA is the top decision-making body for SEZs headed by the Commerce Secretary and comprising senior officials from a number of ministries and departments including finance, agriculture and home.