Mohsin Siddiqui (Chief Reporter)
The federal government has concluded the formulation of a 10-year ‘Solar Panel Local Manufacturing and Allied Equipment’ policy, aiming to boost local production through a series of incentives and tariffs on imports. Sources reveal that the policy is designed to encourage manufacturers by imposing tariffs on imported finished goods while providing exemptions for raw materials and machinery used in local manufacturing.
The policy’s development was initiated by the Special Investment Facilitation Council (SIFC) during its 5th Apex Committee meeting in September 2023. Following extensive consultations and meetings, the ‘Solar Panel and Allied Equipment Manufacturing Policy 2024’ has been crafted, with a focus on increasing investment, production capacity, exports, and localization in the solar industry.
Key highlights of the policy include a long-term plan spanning 10 years, with incremental targets for investment, production capacity, and localization. Manufacturers are required to enhance their capacity gradually while maintaining a balance between export and local sales. Additionally, localization targets are set to increase annually, ensuring a steady growth in domestic manufacturing.
To incentivize compliance with the policy objectives, exemptions on duties and taxes will be provided based on the submission and approval of a business plan aligned with the specified roadmap. However, non-achievement of targets may result in the withdrawal and recovery of incentives, subject to certain conditions.
Importantly, tariffs on imported finished goods will be gradually imposed over the policy period, further incentivizing local production. Bank guarantees equal to the amount of tariff and tax exemptions will be required from investors to ensure accountability.
The implementation and monitoring of the policy will be overseen by relevant government bodies, including the Input Output Coefficient Organization (IOCO) of the Federal Board of Revenue (FBR). Stakeholder feedback will be sought before finalizing the policy, with further deliberations expected at the Economic Coordination Committee (ECC) level.
