India protects local solar cell manufacturers by raising duties

REGULATORS in India plan to slap a 70 percent import duty tax on cheap Chinese and Malaysian-made solar cells to help protect Indian solar panel makers, such as Adani Group.

However, solar farm developers are warning the emergency tax could halt growth in the fast-expanding renewable energy industry, according to reports from The Financial Times.

The tariff could also have a huge impact on the Chinese solar panel sector which relies on exports to India because of domestic oversupply.

India’s biggest panel makers, including Adani Group, have been calling for such a duty and their appeal was finally accepted by New Delhi’s Directorate General of Safeguards (DGS).

The Directorate said the proposed tax will last for 200 days until it can find a more permanent solution.

In its provisional findings, the DGS argued: “Increased imports, which show no sign of abating and on the contrary are further increasing significantly, threaten to cause serious injury to the domestic industry in the coming days.”

However, energy companies have expressed anger and dismay at the tax.

“This is being done to protect only a few Indian manufacturers, but it will increase the cost of all solar installations,” Renew Power Chief Executive Sumant Sinha told The Financial Times. “This could put the industry in major uncertainty in terms of adding new capacity.”

Furthermore, smaller solar cell manufacturers say the emergency tariff includes raw materials, making it more expensive for them to produce the cells. A small number of Indian companies make the individual solar cells that are then set together to make the panels.

India’s government has set ambitious plans to build 100 gigawatts of new solar power by 2022. It remains to be seen if the proposed new duty will jeopardise meeting this target.

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