Expiry of safeguard duty: Boon for solar developers, bane for manufacturers

 Sector executives feel this would exacerbate the problems of domestic manufacturers of solar cells and modules.

Indian solar cell and module makers may see difficult times ahead with no protection from imports till April next year.

Safeguard Duty (SGD), which was imposed on solar cells and module imports for the past two years, expired last month and the Basic Customs Duty (BCD), announced by the Centre, will kick in only after 9 months.

Sector executives feel this would exacerbate the problems of domestic manufacturers of solar cells and modules. But for solar project developers, it’s a boon as they would be able to import before the BCD is enforced.

“The 9-month duty-free period, with a ‘free for all, gives a much-deserved breathing space to Indian solar developers. We can expect a huge uptake in imports of solar modules and equipment,” said Animesh Damani, managing partner, Artha Energy Sources. He said the industry may see a reduction of close to 15 per cent in solar tariffs, with more projects and new players entering the business.

In recent tenders, project developers have started quoting competitive tariffs in anticipation of taking advantage of the duty-free period by importing low-cost material.

There is a price difference of about 10-20 per cent between Indian and Chinese solar cells and modules. India imports close to 90 per cent of its solar cells and modules and nearly 80 per cent of this is from China. According to industry data, India has 3,100 Mw of cell manufacturing capacity and 9,000 Mw of module manufacturing capacity. India’s installed capacity of solar power stands at 39.08 Gw (including ground-mounted and rooftop).