As Indian Solar Manufacturers Try to Game the “Make in India” Content, Government Clamps Down

Indian corporates have regularly been making headlines these days due to issues of corporate governance, fraud, and corruption. The IL&FS financial crisis which started last year has made a number of other Indian companies fall like dominoes, due to issues of financial misgovernance. Indiabulls housing finance and DHFL which were/are the some of the largest home mortgage financial providers have also seen their dirty linen being displayed in public and have seen massive value erosion. Even Infosys which is held as the paragon of corporate virtue and governance has seen whistleblower complaints against its CEO and CFO.

There is a huge mistrust between the Indian government and the corporates mainly due to malpractices and unethical actions by the industrialists. This has been the normal mode of operations for most Indian companies even large ones. Siphoning of publicly listed company money to their own pockets is a staple practice for most promoters. This has been legally done taking advantage of the minor shareholders. Even large companies with a global footprint and multinational companies have been mired in issues of corporate misgovernance.

The Indian government has also clamped down rapidly on a sharp practice by Indian solar manufacturers to use semi celled solar cells imported from China in its “Make in India” solar programs. The Indian companies have been crying for a long time asking for protection from the predatory Chinese practice of dumping solar cells and panels at very low prices in the Indian market. The Indian renewable ministry has made three programs such as the rooftop solar, pumps and the CPSU scheme where only Indian made solar cells and panels can be used. This gives a large captive market to Indian domestic solar players who are now facing the problem of not having enough capacity at least in the solar cell part of the supply chain to meet the growing demand that is expected.  Some of the makers were now importing semi-finished solar cells (undiffused) and doing minimal value addition to market them as Indian made products. This again brings into sharp focus of how Indian companies only try to game the system to make abnormal profits rather than create world-class manufacturing facilities to compete with the best in class global players.

Also, read Good News For The Indian Solar Industry!