According to people familiar with the discussions, the Reserve Bank is reviewing a recommendation from banks to include loans to solar panel manufacturers in the priority sector lending bracket and is expected to make a decision within the next two to three months.

"Two recommendations were agreed upon after discussions with all stakeholders." While banks sought priority sector designations for solar panel manufacturers, the renewable energy ministry "has made a case for considering changes to the production-linked incentive (PLI) scheme for this sector," according to an official who requested anonymity.

Officials from the ministries of finance and renewable energy, as well as bankers, have met several times in the last two months to discuss financing issues confronting solar photovoltaic manufacturers, and recommendations have been sent by the banks. Solar industry groups claim that duty-free imports from Southeast Asian countries under free trade agreements, or FTAs, are harming domestic manufacturers.

According to a bank executive, the finance ministry has asked lenders to contribute to the development of a policy to ease financing for the sector.

"The proposal to include this in priority sector lending and PLI schemes is consistent with discussions with association members and renewable energy ministry representatives," he said.

Previously, solar associations claimed that solar exports had not decreased as expected.