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Indian solar water heater manufacturers are in hot water, thanks to their Chinese counterparts. The domestic solar water heater manufacturing industry, valued at about Rs 1,000 crore, is being threatened by cheaper China-made imports, the Solar Thermal Federation of India (STFI) has alleged.
According to the STFI, complete solar water heaters imported from China are hampering not only the manufacturing segment but also the product quality being delivered to the end user. China is the largest producer of the tubes used in solar water heaters; there are no such manufacturers in India.
Jaideep Malaviya, secretary general of STFI, claimed that as soon as the Indian government withdrew the subsidy for solar water heaters, the Chinese government withdrew the export incentive of nearly 17% that Chinese tube manufacturers were getting after classifying the product under the category of glass exports.
As a result, the Indian importer also has to pay additional import duty.
"The Chinese government extended export incentive on complete solar water heater system that included the vacuum tubes in order to capture the growing markets like India and created a separate Harmonised System (HS) code," says Malaviya.
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The imported systems thus become cheaper than domestically manufactured ones, but at the cost of quality, resulting in rise of Chinese exports, he pointed out.
"The inferior quality systems are now being imported and this will have a direct bearing on local manufacturers who will not be able to compete and is leading them to the become dealers of Chinese manufacturers to sustain in the market," STFI said.
The end user is at the receiving end as the Chinese system may not last long and will not find value for money. This is certainly going to impede the “Make in India” tag, which the present government is strongly advocating, Malaviya said.
"To stem further damage to the industry, the STFI is seeking immediate help from Ministry of Finance to come up with a separate HS code and impose some import duty, else India may soon become a dumping ground and also render several jobless due to closure of local manufacturing . Already the manufacturers are yet to receive the subsidy claims from government amounting in excess of Rs. 300 crore," said Malaviya.
The average market for solar water heater in India is about 1 million (10,00,000) square metre. The benchmark price as per Ministry of New and Renewable Energy is Rs. 8,500 per square metre for evacuated type solar water heaters, which makes it an almost Rs. 850 crore industry. A substantial revenue will flow out to Chinese manufacturers if cheaper imports are not controlled with suitable import duty structure.
Today India has installed just over 80 lakh square meters of solar water heater area. In terms of capacity, India is the fifth largest and in terms of growth it is the third largest annually growing market after China, followed by Turkey.
