“Till June this year, no one purchased panels as they were fighting legal cases to pass through the increased cost due to safeguard duty. Now they are waiting for the safeguard duty to get over. The gap in procuring solar panels
is showing on overall target. There is a deficit of 5-10 GW in the projects slotted for this year,” the executive said
In 2018, the Indian government announced imposition of safeguards duty on solar cells and modules for two years – 25 per cent in the first year, 20 per cent for six months, thereafter, and 15 per cent after that. The industry in a separate petition has asked the government to consider extending the duty beyond two years.
The duty specifically impacted the exports coming from China, as more than 85 per cent of India’s solar capacity is built on Chinese panels. In the past on and half year imports of solar cells and modules have come down drastically. Imports of cells, pegged at $ 2.15 billion in 2018-19, have gone down to $ 1.26 billion in the current financial year upto October. Cell imports had peaked at $ 3.83 billion in 2017-18.
The domestic solar manufacturing industry in a petition has now asked the Centre to consider extending the duty beyond two years. “Imports are not going to stop. Any more duties will just further delay the growth of the sector. Rather India should open its manufacturing for global players,” said the executive quoted above.
At the same time, the decision to restrict imports has been driven by the government's desperation to bridge the trade deficit with China, which stood at a massive $53.5 billion in 2018-19.
However, New Delhi had managed to reduce this deficit from the even bigger $63 billion worth of trade mismatch registered in 2017-18. This involved the raising of customs duties on inbound goods from China as many as eight times over a year.
“Most of these duties were anti dumping and safeguard in nature, to counter market distorting trade practices by Chinese firms. If similar duties are again prescribed, we will not oppose it," a senior Commerce Department official, said.
The Commerce Department is exploring ways to curtail imports solar, wind equipment further as part of its plans to push domestic manufacturers to produce more and substantially change the import cycle. Latest official data shows that trade rival China still accounts for the majority of cells ($957 million in the current financial year).
Interestingly, while Malaysia used to be a dominant player earlier, imports from the nation have trickled to a bare $ 3 million now. In its place, Vietnam has become the second-biggest country of origin shipping $ 117 million worth of equipment. Trade officials revealed investigations on whether these shipments are originally from China are currently ongoing. Electronic makers from China routinely take advantage of India's liberal trading arrangement with Vietnam, a DGTR official said.
On the export front, shipments from India have seen a slow rise in the current year, after slightly reducing in 2018-19. In the current year, of the 7,500 MW target, 3033 MW has been commissioned.