The recent suggestion of the Directorate General of Safeguards Duty (DGS) to impose a 70 per cent duty on import of Chinese solar equipment might make power costlier, feels the industry.
Chinese solar import has grown 643 per cent from 2014-15. However, this has also helped the fall of solar power rates to a recent record low of Rs 2.43 a unit, due to cheap solar power panels, mostly from China. Power developers fear the duty, if imposed, would lead to escalation in rates.
The DGS in its preliminary report investigating dumping of solar cells (whether or not assembled in modules or panels), has suggested a duty of 70 per cent on import from China and Malaysia. It has identified ‘serious injury’ to the domestic industry from the rising import and declining prices of Chinese solar panels.
The DGS has also observed that while China’s import growth slowed in other countries, it increased considerably towards India. The reasons cited are duties imposed by both the European Union and America on Chinese solar imports. There has also been a surge in Indian demand due to the government’s target revision of solar capacity addition to 100 Gw by 2022.
Indian developers also have lately reduced dependence on other countries. DGS has not suggested any duty on import from the US and EU, as the share of shipment from here is only about three per cent. That from China has increased to 90 per cent in five years.
The DGS investigation was in response to an application by the Indian Solar Manufacturers’ Association (Isma), pleading damage to the indigenous sector. They say around 80 per cent of the market has been taken away by import.
“We welcome this initiative by the government, as it is bound to increase employment and help achieve the required energy security. The duty will give the necessary boost to solar cell and module manufacturers,” said Hitesh Doshi, chairman, Waaree Group.
The DGS has also said solar manufacturing units in Special Economic Zones should also attract the duty.
Shreya Jai looks at the authenticity of the claims through the prism of numbers: