Many developers had expected basic customs duty (BCD) to replace safeguard duty at the end of this month. Power and renewable energy minister RK Singh recently told stakeholders that BCD of 20-25 per cent on solar equipment would be imposed in August
New Delhi | Bengaluru: Domestic solar manufacturers have welcomed the move to extend safeguard duty on Chinese equipment, although project developers said there should be a clear long-term policy.
The All India Solar Industries Association also said the duty should be increased to at least 50 per cent from 15 per cent.
“For investment in manufacturing, investors need visibility of business and protection against dumping for at least seven to eight years,” Hitesh Doshi, chairman of AISIA, told ET.
The National Solar Energy Federation of India’s CEO Subrahmanyam Pulipaka echoed the sentiment, saying: “We support any move that protects India’s domestic manufacturing interests.”
The Directorate General of Trade Remedies recommended the imposition of safeguard duty on Chinese solar imports for one more year at 14.9 per cent for the first six months from July 30 and 14.5 per cent for the following six months. While the local industry wanted the duty to be extended for four years, the directorate said a one-year extension would be adequate.
Many developers had expected basic customs duty (BCD) to replace safeguard duty at the end of this month. Power and renewable energy minister RK Singh recently told stakeholders that BCD of 20-25 per cent on solar equipment would be imposed in August.
“The only thing we have said ad-nauseum is to please give clarity. This is confusing and it doesn’t help anyone,” a developer said, requesting anonymity.
“We await clarity from the government on long-term policy interventions that have been in the realm of discussions, on creating a level playing field for domestic manufacturing of solar PV in India,” a leading panel manufacturer said. “Short-term measures like safeguard duty and the current recommendation on a limited extension will have a limited impact on creation of a truly self-reliant PV (photovoltaic) supply chain in India.”
India’s current manufacturing capacity is estimated to be 3,000 MW for cells and 10,000 MW for modules, but demand is expected to reach 20,000 MW in some years.
“While the manufacturing associations are happy, the capability on the ground needs to be questioned. Do they have a plan to ramp up their production to meet the demand in the market?” asked PwC’s clean energy partner, Amit Kumar. He said additional duty would require developers to pass on the cost to consumers.
The panel manufacturer also said that safeguard duty might be intended to protect domestic manufacturers located in special economic zones where they are allowed tax concessions. The person said that if BCD were to be imposed, local manufacturers located in SEZs would have to pay BCD.