technology

India Proposes 70% Duty on China, Malaysia Solar Imports

Updated on
  • Finance Ministry cites threat to local industry, job losses
  • Proposed safeguard duty would remain in effect for 200 days

Photographer: Tomohiro Ohsumi/Bloomberg

India, the largest importer of Chinese solar equipment, proposed a 70 percent safeguard duty on cells and modules shipped from China and Malaysia, citing “threat of serious injury” to the domestic industry.

Acting on an application by five local cell and module makers, the Directorate General of Safeguards, Customs and Central Excise made the proposal in a document dated Jan. 5. It recommended the levy remain in effect for 200 days.

Lion's Share

India imported a third of China's solar shipments from January to September last year

Source: Bloomberg New Energy Finance

“Existing critical circumstances justify the immediate imposition of a provisional safeguard duty in order to save the domestic industry from further serious injury, which would be difficult to repair,” the Finance Ministry said in the document, also citing the potential for job losses.

India’s annual manufacturing capacity for solar cells is only around 3 gigawatts, compared with the average requirement of 20 gigawatts, according to a government note last month. The rest has to be purchased on the international market, it said. The South Asian nation was the largest solar-cell and module importer from China last year, buying a third of that nation’s $8 billion of shipments from January through September, according to research by Bloomberg New Energy Finance.

The ministry’s document said China’s solar exports to India constituted 1.52 percent of its total global exports during 2012, a figure that surged to almost 22 percent in 2016.

Read more about how imports help reduce India’s solar power prices

“India’s solar story is built on Chinese panels and the duty, if implemented, would mean the end of record low solar tariffs that we saw in 2017,” said Vandana Gombar, a BNEF analyst in New Delhi.

The government’s proposal came after five domestic manufacturers -- Adani Enterprises Ltd.-backed Mundra Solar PV Ltd., Indosolar Ltd., Jupiter Solar Power Ltd., Websol Energy Systems Ltd. and Helios Photo Voltaic Ltd. -- filed an application on Dec. 5 seeking a duty on imports of solar cells “whether or not assembled in modules or panels.”

(Updates with comment from Ministry in third paragraph.)
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