In a bid to bolster domestic manufacturing of solar PV cells and modules, the Government of India, under the aegis of the Ministry of New and Renewable Energy (MNRE), has adopted a policy of Domestic Content Requirement (DCR) wherever it is permitted by the World Trade Organization (WTO). This strategic approach aims to encourage the growth of the solar industry within the country. However, to curb any potential misuse of this policy, the MNRE introduced a comprehensive set of measures outlined in an official memorandum dated 20 February 2018, which outlines the penalties for non-compliance with DCR provisions in solar PV power projects under MNRE’s schemes and programs.
These penalties are as follows:
Criminal Proceedings: The MNRE or its designated agencies are authorized to initiate criminal cases under the Indian Penal Code, including Section 420 and related sections, against entities found in violation of DCR norms.
Blacklisting: Developers found in breach of DCR regulations may face blacklisting for ten years, effectively disqualifying them from participating in future MNRE schemes and projects.
Bank Guarantee Forfeiture: Any relevant bank guarantees provided by the defaulting party may be forfeited to compensate for the loss incurred due to non-compliance.
Disciplinary Action: Officers from Central Public Sector Units (CPSUs) or State Governments responsible for overlooking DCR adherence are subject to disciplinary proceedings.
Additional Actions: In addition to the aforementioned measures, the MNRE reserves the right to take any other necessary actions to address violations and promote compliance.
Recent concerns have arisen regarding the adherence of solar PV module suppliers to the DCR provisions outlined in MNRE’s schemes and programs. Consequently, the MNRE underscores the importance of strict compliance with DCR provisions and reiterates that any infringement will result in the punitive actions detailed above. This reinforcement of the DCR mandate has been approved by the competent authority, demonstrating the Indian government’s unwavering commitment to promoting the growth of domestic solar manufacturing while upholding international trade agreements. By imposing such stringent penalties for non-compliance, the government aims to create a level playing field and nurture the domestic solar industry’s development.
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