The Ministry of Power will launch a domestic manufacturing programme for critical power and renewable energy equipment at an outlay of Rs 1,500 crore in the coming financial year. The scheme titled ‘Manufacturing Zones under Atmanirbhar Bharat Package’ in the Union Budget would entail setting up three manufacturing zones in a year.
These zones are divided into three categories– coastal, land-locked and hilly states. The scheme would call for offers from the states to submit applications to set up these zones. The three selected zones would get Rs 500 crore each for the development of manufacturing hubs.
Senior officials said a committee would select which state offers the best facilities for these zones. “The selection criteria would be based on land, cheap infrastructure facilities such as electricity, water, sewage treatment etc. The Centre would provide common infrastructure and testing facilities at these zones,” said an official.
The equipment testing facility would be set up by Central Power Research Institute (CPRI) for power equipment and for renewable equipment, National Institute of Solar Energy (NISE) and National Institute of Wind Energy (NIWE) would set up testing.
The Centre is also planning to give open access power supply to these zones in case the selected states are unable to supply cheaper electricity.
“The states will form an SPV which would be transferred to the private companies when they set up the manufacturing facilities. The focus would remain on equipment which is manufactured in India but is still imported,” said the official.
The Union power ministry in September 2020 had released a list of close 80 items which are imported despite sufficient domestic capacity. “We would also aim to set up manufacturing of new-age equipment which are yet not available in the Indian market,” said an executive.
Indian Electrical and Electronics Manufacturers’ Association (IEEMA) said the scheme comes at the right time as imports have been restricted now.
Following the border clashes with China in Galwan valley, Ladakh, the Ministry of Power, through a public order in July 2020, announced import restrictions on equipment used for ‘power supply systems and network’ citing security threat and cyber-attacks. While banning import from China, the ministry said prior permission would be needed to import from countries in the ‘prior reference’ list which now includes China and Pakistan.
“It is essential in the long run that we manufacture most of such power equipment and their components. So, this scheme is very welcome,” said Sunil Misra, Director-general, IEEMA. The association was part of the consultative process for the scheme.
He, however, added that there should be a joint task force of the industry and the government to identify such large manufacturers, including global players. “There should be high-level government representatives or envoys to approach global and domestic majors to invest in India for manufacturing power equipment,” said Misra.
According to the data collected by the Indian Electrical and Electronics Manufacturing Association (IEEMA), of the 58 identified equipment used in power supply infrastructure, there are only four products for which there is no domestic capacity and two products for which there is alternate technology available in India.