The current safeguard duty (SGD) of 14.5% on imports is due to expire on July 30. Due to World Trade Organization (WTO) rules, a DMS cannot be applied for more than four years; India is currently in its third year.
Even though the DGS is extended for the fourth and final year, WTO rules also impose a progressively lower tariff rate, which would translate into a SGD of around 14% for the coming months.
Meanwhile, the government plans to levy a base tariff of 25% on solar cells and 40% on modules from April 2022. This provides for an 8-month vacation window that developers of Electricity Indians hope to tap by storing solar modules for future projects. .
“This period will have a crippling effect on domestic manufacturers, which could also lead to the closure of units in India, putting 200,000 jobs at stake in the sector,” said a spokesperson for All India.
Association (AISIA), an industry body representing national solar energy manufacturers.
Solar, Tata Power Renewables,, Goldi and Websol as members. They combine to form 11,000 megawatts of production in India and will reach 20,000 megawatts by the end of the year.
Currently, over 80% of Indian solar equipment used in energy projects is imported from China. This figure will rise to 100% between August and March, added the spokesperson for AISIA.
“Until the BCD comes into effect on April 1, 2022 and the safeguard duties expire in July 2021, the government must implement measures to protect imports from foreign dumping during this waiting period,” he said. said Gyanesh Chaudhary, Managing Director of Vikram Solar, India’s largest solar powerhouse. manufacturing company.
Favorable global conditions, but Indian manufacturers lagging behind
Despite a host of entry barriers such as SGD, inbound BCD, and the Productivity Incentive Program (PLI) for solar manufacturing, India’s solar industry is lagging behind in terms of generation capacity, technology and price. Indian modules cost around 25% more than their Chinese counterparts.
The 25% difference has narrowed since the start of the year as the global raw materials supercycle and production delays linked to Covid-19 in China have pushed module prices up 35% since June of l ‘last year.
“The price difference between modules made in India and imported ones has narrowed after the recent surge in global module prices. If similar gaps persist, the BCD is likely to fill them, thereby helping domestic module manufacturers, ”said Debasish Mishra, Partner, Leader. – energy, resources and industrial products, Deloitte India.
“The international module markets are volatile and prices have fluctuated. China itself is struggling to increase production after the uncertainties associated with the pandemic, ”added Deepto Roy, partner of Shardul Amarchand Mangaldas & Co.
Solar modules represent 60% of the capital expenditure of any renewable energy project. With the competitive bidding process boiling down to one-time payment, the lack of competitive pricing by Indian companies makes it an easy choice for developers to opt for overseas-made ones.
Some domestic manufacturing companies have been transferred to the General Directorate of Trade Remedies (DGTR) of the Department of Commerce to impose an anti-dumping duty covering the duty-free period. However, at the time of going to press on Tuesday, the DGTR had still not completed its investigation into the matter.
“The government is very committed to the Make in India initiative and therefore solar equipment manufacturers expect the safeguard duty to be extended to cover this transitional period,” said Hitesh Sachdeva, partner, adviser on business, KPMG India.