MNRE Takes Aim At Violators Of Domestic Content Requirement Norms

Violators of Domestic Content Requirement Norms To Face Strict Action

The Ministry of New & Renewable Energy (MNRE) has found it necessary to iterate several measures that indirectly seek to give domestic solar manufacturing impetus. The Production-Linked Subsidy (PLI) Scheme and the ALMM (Approved List of Module Manufacturers) are significant measures in this direction.

It also mandates the idea of DCR (Domestic Content Requirement) that requires a certain share of locally-produced solar cells and modules instead of being entirely reliant on imports. Further, it also imposed BCD (Basic Customs Duty) on solar cells and modules to discourage imports.

In its recent order, the MNRE has now laid down the legal and punitive action that violating the DCR norms (as per WTO regulations) will invite. The MNRE or an agency on behalf of the MNRE can impose these actions on the violators or solar project developers.

These include filing criminal cases under IPC 420 & related sections, blacklisting developers for ten years, forfeiting relevant bank guarantee(s), disciplinary action against the concerned CPSU/ State Government officers, and any other additional action. It follows that perhaps issues have been brought to the MNRE’s notice involving alleged violations by developers.

In 2017, it came to light that Chinese solar modules of substandard quality were being sold off in the domestic market. Taking cognizance of this, in 2018, the government announced a crackdown on projects that used imported cells and modules in their projects and declared them as domestically produced. The intention to bring the violators to book was again made clear in 2020.

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Notably, in September, the MNRE also announced an extension on the waiver for the DCR for solar cells employed for projects under PM KUSUM until March 2024. This extension underlines the challenges being faced by developers to meet DCR requirements.

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The MNRE order can be accessed here.