Disappointing Outcome Prevails A Year After The Imposition Of Solar Safeguard Duty

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  • Before the imposition of the duty, 90 per cent of solar panels and modules were imported from China and Malaysia
  • Most of the cell manufacturers have shut down and module manufacturers are operating at low capacity utilisation and/or betting on exports

No new domestic manufacturing unit has been set up India in the last one year after the imposition of additional import duty on solar cells and modules to stimulate local production and reduce dependence on imports. The information was shared with the Economic Times by a renewable energy consultancy firm, Bridge to India.

Representative image

India imposed a safeguard duty on July 2018 for two years. The duty was pegged at 25 per cent for the first year, 20 per cent for the next six months, and 15 per cent for the last six-month period. 

Before it was imposed, around 90 per cent of solar panels and modules used in local solar projects were imported, mostly from China and Malaysia, as they were cheaper than locally manufactured ones. The imposition of safeguard duty has not changed the situation. 

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Relying on exports
Share of imported modules in utility-scale solar still hovers around the 90 per cent mark, consistent with the preceding years, said Bridge to India in a recent weekly report on the solar industry. The report noted that local manufacturing remained in dire straits. The firm further stated that most of the cell manufacturers have indeed shut down and module manufacturers are operating at low capacity utilisation and/or betting on exports.

Six months ago, the English Daily reported that no new investments had been made. The implementation period of two years is too short to attract new manufacturing investments, Bridge To India said in its report. 

The report also suggested that some solar project developers are also importing from countries where the duty does not apply, such as Thailand and Vietnam.

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