The 25 per cent safeguard duty on solar cells and modules imported from China and Malaysia has created a level playing field for some of the domestic manufacturers. But the industry is not too happy with the two-year limit on the duty. The no-exemption for SEZs has also irked some of the manufacturers.

Kolkata-based Vikram Solar has on August, 2, filed a writ petition in the Orissa High Court seeking relief from the duty on manufacturing facilities located in SEZs.

“If the safeguard duty is applied without exemption as per the notification, the domestic manufacturers in the SEZ will also be liable to pay whenever they sell the modules in India. This is because SEZs are considered to be outside the ambit of Indian customs territory and this would, therefore, be counterproductive for the domestic industry,” Gyanesh Chaudhary, MD & CEO, Vikram Solar said.

According to him, 40 per cent of PV module manufacturing units and 60 per cent of cells manufacturing facilities are located in SEZs.

“The future of domestic manufacturing is still highly uncertain and safeguard duty alone is unlikely to make any tangible difference because of the limited 2-year period of application,” Vinay Rustagi, Managing Director of Bridge To India, told BusinessLine .

“We believe that the Indian manufacturers are likely to file another petition for anti-dumping duty shortly for this reason,” he said. “The government is simultaneously considering other incentives for domestic manufacturers, which could include issuing tenders for projects that can only use domestically manufactured modules,” Rustagi added.

Expansion plans

Meanwhile, industry experts estimate that the domestic cell and module manufacturing capacity which currently stands at around 5-6 GW, can grow to 8-9 GW if domestic players realise their plans for capacity expansion.

“The current scenario presents a favourable opportunity for growth. If the authorities are vigilant about protecting domestic interests, and not letting India become a dumping nation again, we expect to double our current manufacturing capacity of 1.5 GW in the next few years,” Sunil Rathi, Director, Waaree Energies, one of the largest domestic manufacturers, told BusinessLine .

Adani Solar, has earlier this year announced plans to scale up its modules and cells manufacturing capacity from the current 1-2 GW to around 3 GW in the next 2-3 years.

“Investments in advance technology green field and brown field PV products manufacturing units is a critical success parameter of the safeguard duty,” according to Ashish Khanna, MD & CEO, Tata Power Solar.

Tata Power Solar currently has a production capacity of 400 MW for modules and of 300 MW for cells.

In its report on solar manufacturing industry earlier this year, KPMG said in the absence of strong local manufacturing, India will need to import $42 billion of solar equipment by 2030 to achieve its target of 100 GW of solar capacity addition.

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