Domestic solar companies wary over the looming expiry of safeguard duties

Our Bureau Hyderabad | Updated on July 27, 2021

Fear that lack of import barrier on solar modules and policy vacuum will put the sector’s survival at stake

Domestic solar manufacturers stare at uncertainty as safeguard duties expire this month. They further fear that the ambiguity over policies until the basic customs duty sets in next year could impact the survival of the sector.

According to a statement from the All India Solar Industries Association (AISIA), “There will be no duty barriers for imports of solar modules from the date of SGD [safeguard duties] expiry to the date of implementation of BCD [basic customs duty] in April 2022. This nine-month period will have a crippling effect on domestic manufacturers, which may also lead to the shutdown of units in India, putting 200,000 jobs at stake in the sector. If the Government fails to bring in any substantial measures, history will repeat itself thus making India a dumping ground for solar equipment.”

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Moreover, since the duties levied on raw materials remain unchanged, it will result in huge cost differences for indigenously produced solar modules. The hefty duties on imported raw materials will make domestic products costlier compared with internationally produced modules.

Describing the lack of clarity on interim measures as disconcerting, the association says it is dissuading domestic players from buying solar cells and modules from Indian manufacturers.

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“As a matter of fact, we are already witnessing delays in project installations and cancellations of orders as most are awaiting cessation of safeguard duty to place orders for internationally made modules. From August, 100 per cent of solar module equipments will be imported, with no tariff restrictions or policies to aid Indian manufacturers to sustain operations,” it stated.

With the economies of scale, it is imperative to protect the interests of domestic manufacturers and infuse confidence among them, it added. To provide immediate respite, it suggested that the government could implement ALMM (approved list of models and manufacturers) through discom provisions, advance the BCD or charge provisional anti-dumping duty during the nine-month period to help the sector sustain operations.

“While we are positive about the government’s support to the sector, transparency and clarification on existing laws will go a long way in bringing us some relief,” it added.

Published on July 27, 2021

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