India Won’t Impose Safeguard Duty on Imported Solar Equipment

The decision had different effects on solar players in the country. On the one hand it had delighted manufacturers while as on the other hand it alarmed developers about the steep rise in input costs.

Overruling the directorate general of safeguards’ recommendation of 70% levy on imported solar equipment, the government has reversed the decision of imposing safeguard duty on imports from China and Malaysia.

The decision had different effects on solar players in the country. On the one hand it had delighted manufacturers while as on the other hand it alarmed developers about the steep rise in input costs.

The petition that challenged the proposed duty was disposed by Delhi High Court after the government counsel said the recommendations are not binding.

Secretary, Ministry of New and Renewable Energy , Anand Kumar said “As of now there will be no duty, if it ever comes up in future, we will make sure the interests of all stakeholders are safeguarded.”

The decision comes as a huge relief for solar developers, given the fact that about 90% of the equipment used in the country is imported from countries like China, Malaysia and Taiwan.

The petition filed by the Acme Solar said that imposing the duty would directly affect the tariffs. It claimed that the tariffs would increase from current Rs 2.50 per unit at present to around Rs 4.50 per unit and can cause damage to the business.

Investments by companies such as ReNew Power, Tata Power, Hero Future Energies, Greenko, Acme Solar and Azure Power, has led the rapid expansion of India’s solar power capacity. Similarly, the solar power tariffs also plunged to record low at the auctions due to the cheap imported equipment.

It was after the petition from Indian Solar Manufacturers Association (ISMA) that DG safeguards had made recommendations for levy in imported products. The claim made by ISMA was that imports from China and Malaysia were cheaper than panels that are made locally.

The manufacturers who filed the petition are Mundra Solar (part of Adani Group), Indosolar, Jupiter Solar Power, Helios Photo Voltaic and Websol Energy Systems.

Other manufacturers, who would have gained if a safeguards duty was imposed, include Vikram Solar, Waree Energies, Tata Power Solar Systems, Emmvee Solar Photovoltaic and Moserbaer Solar.