Safeguard duty

A pandemic-related sales slump has dealt another blow to domestic panel makers already faced with rising input costs and an expected surge in imports due to the scheduled wind down of safeguarding duties on foreign products from late July.

Coronavirus disruption has been cited as the chief culprit as imports from China, Thailand and Vietnam slumped from April to January, but safeguarding duty also appears to have had an impact, with unaffected imports from nations such as Myanmar, Chad and Russia on the rise and Malaysian trade keeping steady.

India’s declining solar tariff trend will see a reversal as the basic customs duty comes into effect. According to India Ratings, tariffs will likely touch INR 2.43 when using imported solar modules with 40% duty applicable, putting an additional cost burden on Discoms.

The installation cost is set to increase as a 40% customs duty on solar modules, and 25% on cells, comes into effect from next year.

India’s finance ministry has approved the proposal to levy the duty from April 2022. Customs notification of the move will be issued at a later date.

The government should consider offering a 50% capital subsidy for setting up R&D and quality testing infrastructure within the manufacturing units and a 200% super-deduction for the R&D expenditure on new and clean solar technology development. Simultaneously, it should look at implementing tariff barriers on imports for at least four-five years.

India’s new solar capacity addition was badly hit due to the pandemic. The nation installed just 2.32 GW during the first nine months of the year. However, there was a silver lining too!

Ranjit Gupta, CEO, Azure Power, speaks to pv magazine about solar development in India against the backdrop of Covid pandemic and government’s push for self-reliant India, and the progress of their manufacturing-linked project.

Solar projects under construction face uncertainty as factors like labour shortage and proposed duties on module imports could lead to significant cost overruns for the developers.

A new study by CEEW Centre for Energy Finance assesses the competitive advantage that China has over India and presents a suite of short-term and long-term interventions required for a globally competitive solar manufacturing sector in India.