India’s Prime Minister Narendra Modi’s wants to give China’s manufacturing prowess a run for its money by aiming to positioning his country as the manufacturing hub of the world. The ambitious plan goes by the name of ‘Make in India’, and wants to generate export revenues and create millions of new manufacturing jobs.
Mr. Modi’s initiative requires a new approach to energy generation and conservation in India. The Country looks to Israel as a key partner in renewable energy, clean technology and energy efficiency.
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India wants to attract Israeli private sector players by deregulating direct investment in renewable energy sector. Indian Government would exempt private players from excise duty and offer concessions on the import duty of critical components need for power projects. Additionally, the government has announced long-term tax holidays for renewable energy projects.
After decades of protectionist policies, India is opening up its energy sector to foreign investors. Domestic private and public sector players have proven logistical strength and know-how with regard to scaling up existing energy infrastructure. However, Indians would like to benefit from Israeli expertise – especially in renewable energy sector. Currently, solar and wind energy amount to 6 percent of India’s total energy consumption. India plans to increase up to 15 percent in next 5 years.
According to Dr. Anju Kumar, Deputy Chief of Mission at the Indian Embassy in Israel, “There is huge complementarity between India and Israel in the renewable energy sector. If Israeli companies undertake technological collaboration with Indian counterparty, they can get economies of scale, benefit from Indian government’s favourable incentives for renewable energy and get a huge market in India.”
She points to India’s proven strengths in R&D and welcomes closer cooperation in renewables as well, “Indian and Israeli companies can jointly develop technologies and manufacture equipment for the global market as well.”
Under Mr. Modi’s tenure India has seen a rise in foreign investment. Last year, India’s economy grew by 7.5%, higher than that of China. Despite initial successes Mr. Modi faces a daunting challenge as he sets about modernizing India.
Annually, some 7-8 million Indian youth are expected to enter job market. At current rate, manufacturing sector in absorbing only 1.4 million workers each year. On the whole, the manufacturing sector employs 60 million workforce. However, Agriculture still rules country’s economic landscape and employs 45% of the population.
India’s laudable war on economic poverty would not achieve its desired aims without addressing the issues of energy scarcity and energy poverty. Israel has a chance to team up the world’s second most populous nation to address the most pressing challenge of our times.
(Vijeta Uniyal, 23.04.2015)
