Govt to set up 3 large manufacturing zones for power and RE equipment

• States will be required to submit proposals and will be judged on the basis of the manufacturing incentives they offer

• The plan is to set up one manufacturing zone for power equipment each in a coastal state, a hill state and a land-locked state

New Delhi: The Centre is planning to set up three large manufacturing zones for power and renewable energy equipment in order to cut India's dependence on Chinese imports and build domestic production capacity. The government is planning to offer incentives to companies like availability of land and electricity at lucrative prices in order to woo them into the proposition. A list of equipment has also been prepared which will be manufactured in these zones.

"We have finalised this. We are preparing a Cabinet note. We will be taking it to the Cabinet for approval, and once it is approved, we will float the invitation for bids," Power Minister RK Singh was quoted as saying by Livemint.

States to compete against each other to secure manufacturing zones

States will be required to submit proposals and will be judged on the basis of the manufacturing incentives they offer, for example, the price of land and electricity. The Centre will offer assistance of Rs 500 crore each for setting up common facilities in these zones which will be in addition to the production-linked incentive scheme announced by the government. The minimum area of these power equipment manufacturing zones will be around 300 acre each. As of now, the plan is to set up one manufacturing zone for power equipment each in a coastal state, a hill state and a land-locked state.

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"We have made three groups of states; so, we will set up three manufacturing zones. And these zones will be set up on the basis of fair, transparent and open competition between the states," Singh was quoted as saying. "So, whosoever gets the maximum marks, the manufacturing zone shall be located there," added the minister.

The backdrop

The news comes as the government has been trying to urge companies and state governments to procure materials, equipment and technologies domestically, particularly in the power sector which the government has termed as strategic. The Ministry of Power is already in the process of preparing a list of approved manufacturers for government-backed schemes. 

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