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Global, local solar manufacturers spar over safeguard duty

Global, local solar manufacturers spar over safeguard duty


Bengaluru: The first public hearing on a proposal to introduce 70% safeguard duty on imported solar panels on Tuesday saw heated arguments between global manufacturers of the panels and modules and their local rivals, with Indian solar project developers siding with the foreign players.

At the hearing held in Delhi, the Director General of Trade Remedies (DGTR) asked both sides to submit further rejoinders latest by July 2, after which a final decision on the matter would be made, according to a person present at the meeting.

Officials of the Chinese embassy and the Chinese Chamber of Commerce, as well as representatives of Chinese solar manufacturers like Trina Solar and Indian developers such as Shapoorji Pallonji were present at the hearing. Local manufacturers were represented by Mundra Solar (part of Adani Group), Jupiter Solar Power and others who had jointly complained to the Directorate General of Safeguards (DGS) last December under the banner of the Indian Solar Manufacturers Association (ISMA) that solar imports were causing “serious injury” to the local industry.

Around 90% of solar equipment used in Indian solar projects is imported, 80-85% of it from China, largely because imported panels are significantly cheaper than domestically produced ones.

In January this year, the DGS, after an investigation, found merit in ISMA’s arguments and proposed a provisional safeguard duty of 70% on solar imports. However, secretaries of the concerned departments decided not to levy the duty and instead go ahead with a public hearing on the matter after which a final safeguard duty would be decided on. In May, the DGS and the Directorate General of Anti Dumping were merged to form the DGTR and the departments shifted from the finance ministry to commerce.

The domestic manufacturers not only reiterated their position on imports injuring their business, but also wanted safeguard duty to be increased further, from the proposed 70% to 95%, industry source who attended the meeting said. While solar project developers claimed that such a duty would raise the cost of solar power considerably, local manufacturers maintained that only a small fraction of the total power bought by distribution companies came from solar, and hence an increase in solar tariff would not affect discom finances much. They claimed that currently, the cost of buying solar power was, on average, only 6% of the total cost of power for discoms. They also said the country had lost a huge amount of foreign exchange — around $30 billion — by importing solar equipment, and that domestic companies were making losses because developers were not buying from them.

The Chinese manufactures and Indian developers countered these arguments by pointing out that domestic manufacturers were making losses even before solar imports grew to the size they were now. They said the domestic industry, in any case, did not manufacture enough to meet the needs of India’s solar developers, with their total capacity at a mere 1,600 MW per year. They cited a similar case relating to import of yellow phosphorus, where the DGS had refused to impose safeguard duty because local industry was not in a position to meet the country’s demand.

While the cost of solar power at present may be only 6% for discoms, they claimed it was bound to rise in future, given India’s ambitious solar programme — it envisages 100,000 MW of solar power by 2022 — as well as the assurances given by India at the Climate Agreement in Paris in 2015 to increase use of renewable energy. They also argued that Mundra Solar, the largest of the companies which had petitioned the DGS, had no right to be included among local manufacturers since it was located in a special economic zone (SEZ) and exported all the solar equipment it produced.

Source: economictimes.indiatimes
Anand Gupta Editor - EQ Int'l Media Network


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