Domestic PV companies want India government to impose emergency duty on solar imports from China and other countries.
The five firms that sought imposition of the emergency duty are the Adani-backed Mundra Solar PV Ltd, Indosolar Ltd, Jupiter Solar Power Ltd, Websol Energy Systems Ltd and Helios Photo Voltaic Ltd, reports the PTI.
Following this, India’s Directorate General of Safeguards (DGS) has asked the government to levy an emergency duty, at the rate of 70 percent ad valorem, on the import of solar power equipment from countries like China, for 200 days, to protect the domestic industry.
The DGS, in a January 5 recommendation to the Finance Ministry, said solar cells are being imported into India in such increased quantities — threatening to cause serious injury to the domestic industry manufacturing like or directly competitive products.
The existing circumstances justify the imposition of a provisional safeguard duty to save local units from further serious injury, which would be difficult to repair in case the safeguard measure is delayed.
The safeguard duty will be levied if the Ministry accepts the recommendations of the DGS, which is acting on an application filed by an association of five domestic solar cell and module manufacturers, including the Adani Group.
Before final duties or import taxes are levied, the DGS will hold further investigation into the injury caused by cheap imports. It would hold a public hearing on the issue.
India’s annual manufacturing capacity for solar cells stands at around 3GW as against a requirement of 20GW. The import of solar equipment rose from 1,271 MW in 2014-15 to 4,186 MW in the next year and to 6,375 MW in 2016-17. Current fiscal imports are pegged at 9,474 MW as compared to a domestic production of 1,164 MW.
The growth rate of such imports as a percentage of the domestic production was 1,371 percent during the intervening year 2015-16.
“Even the overall growth rate of the imports relative to its domestic production is very significant, rising from 519 percent in 2014-15 to 814 percent in 2017-18,” it said.
China’s exports to India constituted 1.52 percent of its total global exports during 2012, this increased to 21.58 percent during 2016.
During the first half of 2016, Chinese exports to India were 18.51 percent of its total exports while the combined exports to the EU and the US were 30.65 percent of its total exports.
In the second half of 2016, China’s exports to India constituted 25.09 percent while its exports to the EU and the US fell to 15.12 percent.
In the first half of 2017, China’s exports to India increased to 38.77 percent of its total exports while its exports to the EU and the US shrunk to five percent of its total exports.