Proposed 70 Per Cent Duty On Chinese Imports Will ‘Derail’ National Solar Mission, Experts Say

The Photovoltaic industry has said that the recommendation to impose safeguard duty on solar cells and modules imported from China and Malaysia is ridiculous and catastrophic, PVTech has reported.

Citing “threat of serious injury” to the domestic industry, the Directorate General of Safeguards (DGS) had recently recommended a 70 per cent safeguard duty on solar imports from the two countries. The recommendation, made by DGS after a plea was filed by Indian Solar Manufacturers Association, says the levy should remain in effect for 200 days. In its plea, the association had said that increase in imports have forced manufacturers in India to keep production facilities almost idle.

According to PVTech, the industry members want the government to either reduce the 70 per cent duty significantly or introduce it as anti-dumping duty.

“Rajnesh Trivedi, senior director, sustainable investment banking at Yes Bank, said that a 70% safeguard duty would be a catastrophe for existing PV projects already under construction with PPAs signed, and would kill the solar market. If a less punitive form of remedial action comes in, Trivedi said it would still have a major impact, because by raising the cost of equipment, solar generation prices would also rise. This would spell trouble because consistently lowering prices has been the major driver for renewable energy in India over recent years,” PVTech said in its report.

Vandana Gombar, a Bloomberg New Energy Finance analyst, told Mint that record low solar tariffs seen in 2017 will disappear if safeguard duty is imposed.

According to independent solar market consultant Jasmeet Khurana, the Ministry of New and Renewable Energy (MNRE), while it was discussing potential anti-dumping duties, had said existing projects would not be impacted. Safeguard duties, however, would impact all projects.

“If they go through with it, it will completely derail the National Solar Mission (NSM). So I think the Ministry of Power and the MNRE will oppose it. The Ministry of Finance should also, I believe, see the merit in not imposing such high penalties. 70% is just ridiculous,” he noted.