Non-imposition of Safeguard Duty Further Disheartens Solar Manufacturers in India

Another Announcement by the Government which is unfavorable for the Indian Solar Manufacturing Industry

In a recent announcement made by the government, it was made clear that there will be no imposition of safeguard duties on solar imports into India, as of now. The Directorate General of Safeguards Customs and Central Excise had itself recommended imposition of 70% safeguard duty on solar cells imported from China and Malaysia earlier this year, in order to protect the domestic manufacturing industry. But the recent announcement made by the department has poured cold water on the ambitions of the aggressive domestic manufacturers.

Indian solar manufacturing is in a state of doldrums and with the government further announcing the non-imposition of safeguard duties, large manufacturing companies have started doubting their decision of diversifying into solar. While the power industry is fast growing in India, as demand is poised to grow in the country, the state of solar manufacturing is sad in the country. The Solar market has gained enough traction in India, but the sad part is that majority of the components like solar cells, panels etc. are imported from China and other neighboring Asian countries, which are not only very cheap but also of decent quality.

Also, read India’s Solar Lacks What China Has!

GCL Poly Manufacturing Unit

Why India is not imposing safeguard duty on Solar

Though the stance taken by the government would be a welcome step for the developers who prefer cheap components to earn a profit margin and thus encourage installations in the country, it would be condemned by the manufacturing lot. While a 70% duty sounded too much, the Indian government could have started out with somewhere in between 30%-40%, to lure the Indian manufacturers and encourage manufacturing in India. Check out the List of Major Solar Panel Companies In India By Manufacturing Capacity

India is one of the fastest growing emerging markets, with high demand for commodities, energy, job creation etc. However, cheap imports, especially from China, has eaten up the Indian manufacturing in almost all the industries. The protectionist policies are very weak in our country, which has ended up with “Everything in India being Made in China”.

An imposition of safeguard duty of even a small magnitude would have instilled hope in the hearts of the manufacturing industry. It would have not only supported the Make in India policy but would also have increased job creation opportunities for millions of jobless Indians. India is getting closer to its 100 GW target and is announcing large gigawatt-sized solar tenders. But none of the Indian manufacturers have such large capacities. These tenders would be fulfilled by the likes of large foreign players like GCL Poly planning to own huge production capacity in India. The company recently entered into a JV with Soft Bank of Japan to set up a 4 GW production capacity in India.

It will be sad to witness the state of large indigenous manufacturers in India. I wonder how many would down their shutters at this time.