India has witnessed a sharp fall in the value of solar cells and modules imported from China between April 2017 and March 2019, the government has revealed. The decline is the direct result of safeguard duties imposed by the Indian government in 2018.
Minister of new and renewable energy RK Singh recently informed the Indian Parliament that imports from China have declined from US$2.8 billion in financial year 2017 to US$1.7 billion in financial year 2019. Imports from China are believed to have high an all-time high of US$3.4 billion in financial year 2018. India had imposed safeguard duties on solar cells being imported from China and Malaysia in 2018.
The safeguard duties were imposed after a long-standing demand and multiple pleas from domestic manufacturers to the government to check the massive flow of cheap Chinese equipment. Despite several attempts by the government to promote domestic cells and modules, a number of manufacturers faced financial hardships and failed to secure any notable share in the market.
Ministry of Commerce and Industry had imposed a declining safeguard duty starting from 25% in 2018 to 15% at present. The duty is set to expire in July this year. Supply from China this year has tightened up further due to manufacturing shutdown in China in the wake of the coronavirus spread. Despite this expected decline and reduction in China’s share in solar cell supply, since 2017 Indian manufacturers have approached the government to extend the safeguard duty.
The consistent demand to extend the safeguard duty is reflective of the failure of government’s numerous schemes to boost domestic manufacturing. Dedicated schemes, with incentives, to push solar cell manufacturing, mandatory use of solar pumps and rooftop solar power systems, and project development tenders linked to development of manufacturing facilities have all yielded less-than-satisfactory results to date.
Safeguard duties have been successful in marginally reducing India’s over-dependence on Chinese cells and modules. In FY2017 China’s share in imported cells and modules was 88% which fell to 78% in FY19. Imports from Vietnam and Thailand increased sharply during this period.