The duty of safeguarding domestic solar module manufacturers in India against imports from China PR, Vietnam, and Thailand, is set to end on July 29, 2021. In anticipation of the basic customs duty starts off from April 1, 2022, a 9-month no-duty period has the solar panel manufacturers concerned. The 25% of safeguard duty, declared on July 30, 2018, was enforced on solar module imports from Malaysia and China.
The 25% duty for the first year will be gradually reduced by 5% every six months from the second year until the end of July 2020. In July, the duty was extended and was implemented to imports from China, Vietnam, and Thailand. The safeguard duty was fixed at 14.90% from July 30, 2020, to January 29, 2021, and 14.50% from January 30, 2021, to July 29, 2021.
Past week, the Ministry of Commerce and Industry stated that the Directorate General of Trade Remedies (DGTR) had launched an anti-dumping analysis on imports of solar cells and modules from China, Vietnam, and Thailand. It will take several months for the DGTR to submit its recommendations and suggestions. However, the question that worries everyone is whether the warranty period will last until BCD is considered, or whether there will be a tax exemption window after July.
The Covid-19 pandemic has already imposed a negative impact on almost every industry including the domestic solar panel manufacturing industry, with raw material prices and freight charges being increased. The solar module manufacturing industry is also overwhelmed by supply chain issues and dealing with bad investor sentiment.
Without government involvement, we risk closing factories and losing approximately 300,000 jobs. Solar panel manufacturers in India are appealing to the government to extend safeguard duty or announce an interim duty.
China accounts for over 80% of the module deliveries to the country, and the solar panel manufacturing companies in India are finding it hard to compete with the Chinese prices. Vinay Pabba, the founder of VARP Power, said “This will no longer be a subject of speculation.” DGTR has just filed anti-dumping investigations against imports of solar cells and modules from China, Vietnam, and Thailand.
If this happens, at least for these countries, safeguarding duty will be transformed into an anti-dumping duty. Therefore, from all angles, we can see one of two things happening. Either the safeguarding duty will be temporarily extended to April 2022, or the safeguarding duty of individual countries will be replaced by anti-dumping duties.
While there is no official statement from the government, the investors seem to be unaware of the safeguard duty after July and its effect on the domestic manufacturing segment. Many people believe that this protectionist policy should stimulate domestic manufacturing. While others differ and hold an entirely different outlook on the topic.
Emphasizing the need for duties to defend the interest of the Indian manufacturers, Dhruv Sharma, CEO of Jupiter Solar and the president of the Indian Solar Manufacturers Association stated that, “We have made requests at applicable forums, but we have not received any response from the Ministry of Commerce or the Ministry of New and Renewable Energy so far.”
The authorities replied that they want some more time to evaluate the situation. We are not very optimistic, but we want to do our best. The case is being properly investigated. We request an extension of safeguard duty. We also appealed against the levy of anti-dumping duties. If the deadline is not extended, it will be a big misfortune for the Indian solar module manufacturing sector.
Duties To Counter Imports
Anti-dumping, safeguard, and countervailing duties are usually cast off by the domestic industry to counter imports. Each of them is exclusive. But a backdoor limitation to imports might be coming in the form of ALMM (Approved List of Models and Manufacturers). The government authorities have been strict on the necessary registration of solar module manufacturers under the ALMM.
Only the listed solar module manufacturers and models can participate in government projects such as SECI and NTPC. No foreign suppliers who have paid for the ALMM have been registered since their manufacturing units are not physically inspected, and it may take one more year for that to happen.
Only the listed solar module models and manufacturers can participate in government projects. The solar manufacturing industry needs robust policies and guidelines to sustain – the government owes it to the country to take the emerging solar manufacturing industry under its wing and cultivate it.