While duty is imposed with an intention to protect domestic manufacturers of solar cell & modules and encourage Make in India initiative, it can potentially raise the cost of solar power projects in future, says Rakesh Rao.

 

On July 16, 2018, the Directorate General of Trade Restrictions (DGTR), under the Ministry of Commerce, recommended 25 per cent safeguard duty on imports of solar cells and modules from China and Malaysia for the first year. The DGTR further recommended a 20 per cent duty on such imports for the first six months of the second year and 15 per cent for the remaining half of the year.

 

Since imports of the solar products from other countries, like Singapore and Taiwan, did not exceed 3 per cent individually and 9 per cent collectively, they were excluded from the safeguard duty.

 

Indian Solar Manufacturer's Association (ISMA) - whose members are engaged in manufacturing of solar cells, modules, and glass for modules – has been claiming that the market share of Indian producers has remained stagnant despite rapid expansion in demand for solar cells in the country primarily due to low-cost imports. ISMA had demanded imposition of safeguard duty on imports to protect the industry.

 

Welcoming the move to impose safeguard duty on imported solar panel, Sunil Rathi, Director, Waaree Energies (a manufacturer of solar 

PV module), said, “The current proposal from the DGTR comes as a relief and further strengthens our faith in the Government's support towards Indian manufacturers. Imposition of 25 per cent safeguard duty will provide the necessitated boost to solar cells and module manufacturers. We believe it will help achieve the required energy security in the country, and motivate players to become active partners, as India transitions towards becoming a renewable energy reliant country.”

 

He added, “Given a conducive environment, Indian manufactures are capable of innovation, product efficiency and quality. Safeguard duty is bound to ensure an even playing field for both domestic and imported products. We also foresee this initiative to help in more investments on R&D and disruptive technology.”

 

On the other hand, the Solar Power Developers Association (SPDA) had been opposing a safeguard duty claiming that the move would adversely affect the National Solar Mission as the tariffs for future solar projects could rise substantially. Safeguard duty will put more than Rs 100,000 crore worth of solar power projects in jeopardy, it claimed.

 

According to Maxson Lewis, CEO, Magenta Power, one of the leading service providers of renewable energy solutions in association with Exicom, safeguard duty goes against the principles of a market driven pricing structure. “The government intervention in curtailing imports will drive up the cost of solar installations. What India needs is a driving down of prices not artificially holding it up. This will also cause Indian panel manufacture to stay away from investing in improving their process and products. Indian panel manufacturers have been laggards in developing technology and a safe guard only serves to maintain inefficiencies,” said Lewis.

 

He added, “While at Magenta we have been supporting usage of Indian panels and also high quality imported panels, I am personally not in favour of the impending safeguard duties on imported panels. I would rather have an open playing field bereft of safe guard duties and also any subsidies. Both ways do more harm than good in a mature market.”

 

Safeguard duty goes against the principles of a market driven pricing structure. The government intervention in curtailing imports will drive up the cost of solar installations.

 

Maxson Lewis, CEO, Magenta Power

 

Safeguard duty is bound to ensure an even playing field for both domestic and imported products. We also foresee this initiative to help in more investments on R&D and disruptive technology.

 

Sunil Rathi, Director, Waaree Energies