With New Import Duties On Solar Glass, Borosil Sees ‘Acche Din’ Ahead

With New Import Duties On Solar Glass, Borosil Sees 'Acche Din' Ahead

In October 2023, Greater Noida hosted Renewable Energy Expo (REI) which saw the conglomeration of several renewable industries under one roof. On one side of the show, Borosil Renewable, one of India’s leading solar glass manufacturers hosted its stall. It entertained several solar industry leaders and had a series of meetings. 

In an interview with Saur Energy at the site, Shreevar Kheruka, Vice Chairman of Borosil Renewable lamented over the exemption given to the Chinese/Vietnamese (or foreign) solar glass companies against customs duties for exporting their cheap products into the Indian market. 

This, he said had dented the business avenues of Indian solar glass manufacturers like Borosil Renewable. He told Saur Energy that around 80 percent of the Indian Solar Glass market was dominated by Chinese players who had been dumping cheap solar glass for the solar module makers in the country.

It is noteworthy that in August 2022, the Union government relaxed the norms for the imports of solar glass by discontinuing the anti-dumping duties.  Kheruka talked about the need to re-imposing duties against the imports of Chinese (or foreign brand) solar glass. 

Sudden Spike In Borosil’s Stock Prices 

Nine months after this discussion, the company finally has a relief. Yesterday (July 23), hours after Union Finance Minister Nirmala Sitharaman announced the Union Budget, the stock prices of Borosil Renewable started to shoot up. 

At the end of the day, the firm witnessed around eight percent (8.22% to be exact) rise in its stock price from Rs 478 to Rs 518, registering an unusual growth of 8.22 percent, beating the growth of all major renewable energy companies in India ranging from Adani Renewable, Waaree, Sterling & Wilson or any other brands. The trend seems to continue on July 24 too (till the time of writing this story). 

The sudden spike in stock prices could be attributed to the major announcement of the finance minister on Solar Glass. Sitharaman, during her budget speech, talked about not extending the benefit of custom duties to foreign companies against their imports of solar glass into the Indian market. The annexures of the budget document revealed that the Indian government has decided to increase the customs duty on solar glass imports from nil to 10 percent with effect from October 1, 2024.

This announcement, much awaited by the Indian solar glass makers like Borosil Renewable is now all set to bring “acche din” (good days) for the sector. Overwhelmed by the new development, Borosil Renewable has also issued a statement welcoming the government’s new move. 

“This is to inform that the Finance Bill 2024 presented today i.e. July 23, 2024, has effectively proposed a levy of 10% Basic Customs Duty on imports of solar glass with effect from 1 st October 2024. This is sought to be achieved by the withdrawal of the exemption from payment of basic customs duty available on the import of Solar tempered glass (whether or not coated with anti-reflective coating) for use in the manufacture of solar cells/panels/modules after September 30, 2024. This proposal is subject to Parliament’s final approval of the Union finance bill in due course,” the company said in its filing before BSE.

It also added, “This is a welcome step towards the creation of a level-playing field for domestic solar glass manufacturers and is consequently set to benefit the Company, which is a leading producer of  solar glass in India.”

How Chinese solar glass invasion dented Borosil’s avenues

Borosil Renewable had been talking about the plunge in its profit margins due to the Chinese domination of the sector in India which apparently hurt the avenues of the Indian solar glass industry. The company, though in its Q4 results in FY24, reported a 21 percent growth, but their concern remained unanswered. In its investors call, the management of the Mumbai-based firm told its investors about the reduction in solar glass selling prices which eroded its profit margins. It said that its average selling prices during the quarter witnessed a decline of 3.5% compared to Q3 of FY24 due to the dumping of cheap solar glass from countries like China and Vietnam.

The firm had reported a loss before tax of Rs 21.34 crore in FY24 compared to a profit of Rs 119.14 crore in FY23. The Indian renewable energy company mainly had reported a growth in its export market. In FY24, the company reported a 2.3% progress in its export market, compared to FY23. 

Days Ahead

With the introduction of a tariff barrier (through new customs duty), the government has paved the way for protecting its solar glass manufacturers. However, the final selling prices of Indian solar glass makers and the final price of imported foreign brands after the revised Customs Duty are set to decide the final trade and fate of these products that are indispensable to the solar modules for their manufacturing. 

Unlike solar glass, the domestic solar modules and solar cell industry had been enjoying more government support through the dual benefits of tariff barriers (through Basic Customs Duty on solar cells and solar modules) and non-tariff barriers (like ALMM).

The reintroduction of the Approved List of Models and Manufacturers (ALMM) by the Indian government for the solar module makers has worked wonders to protect the domestic module manufacturers and created new roadblocks for the intrusion of foreign companies (mainly China) from the transboundary trade of solar modules.