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(MENAFN- KNN India) New Delhi, Aug 6 (KNN) The Ministry of New and Renewable Energy's recent amendment to the Approved List of Models and Manufacturers for wind turbine components is anticipated to strengthen India's domestic wind energy supply chain while reducing the competitive advantage of Chinese manufacturers, according to a new report by Crisil Ratings.

On July 31, the MNRE amended procedures for including and updating wind turbine models in the ALMM (Wind), establishing new requirements for original equipment manufacturers to source five critical components from approved domestic suppliers.

The mandated components include blades, towers, gearboxes, generators, and special bearings, which collectively represent 65-70 percent of a wind turbine's total cost.

The amendment introduces additional data localisation requirements, mandating that wind turbine data and control systems be hosted within India through domestic data centres, servers, and research and development facilities.

This provision aligns with the government's broader data localisation and cybersecurity objectives.

Crisil Ratings analysis, covering companies representing 85-90 percent of India's wind OEM industry by order book, indicates the policy change will address cost disparities between Indian and Chinese manufacturers.

Chinese wind companies have significantly expanded their market presence, growing from approximately 10 percent market share in fiscal 2019 to 40-45 percent in fiscal 2025, largely due to advantages from importing lower-cost components.

"Chinese players have expanded their market share from just around 10 percent in fiscal 2019 to 40-45 percent in fiscal 2025, benefiting from low-cost imported components," stated Ankit Hakhu, Director, Crisil Ratings.

He noted that assuming predominantly Indian wind component manufacturers are added to the approved list, Chinese wind OEMs will be required to source locally, potentially reducing their cost advantage and diminishing their pricing benefits.

The policy revision is expected to favor domestic manufacturers, as Indian wind OEMs already maintain a 40-45 percent market share and predominantly source the mandated components locally.

In contrast, Chinese wind OEMs operating in India import a larger portion of components, providing them with a 10-15 percent cost advantage under current arrangements.

India possesses adequate but underutilised manufacturing capacity for the five key components, according to the report. The new policy framework could improve capacity utilisation rates and reduce import dependency across the sector.

The amendment follows a similar approach implemented in the solar sector, where ALMM requirements for solar modules were introduced in April 2024 to promote local production.

The revised regulations will apply to all wind turbine models seeking enlistment in the ALMM (Wind), including both existing and new models, with limited exceptions.

The MNRE will separately release the list of certified component suppliers, with the composition of this list serving as a critical factor for industry observers to monitor.

Industry projections suggest that capacity utilisation for Indian wind OEMs may increase to 50-55 percent in the near term, compared to 30-35 percent in fiscal 2025, supported by robust order books.

The new regulations align with the government's Atmanirbhar Bharat initiative and aim to enhance the sector's resilience against global supply chain disruptions and geopolitical uncertainties.

(KNN Bureau)

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