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AISIA opposes Centre's safeguard duty on imported solar panels and cells, fears negative impact on SEZ-based firms

Mumbai: Strongly opposing the proposed blanket safeguard duty on imported solar panels and cells, the All-India Solar Industries Association on Monday said this levy will badly impact manufacturers operating from the special economic zones.

"SEZ units are treated on par with foreign manufacturers and hence any safeguard duty will be detrimental to the domestic solar industry as a whole," association's general secretary Gyanesh Chaudhary said in a statement.

On 26 December, government ordered a safeguard duty probe on surging solar cell imports with a view to protect domestic manufacturers after the domestic industry approached the Directorate General of Safeguards.

Solar cells, which convert sunlight directly into electricity, are imported primarily from China, Malaysia, Singapore and Taiwan.

The country is targeting 100-gw (gigawatt) solar capacity by 2022 against the current installed capacity of 15 gw and has planned to auction 20 gw capacities by March, and 30 gw each in next two fiscals.

The association further said the specific anti-dumping duty on imports from China, which is flooding the domestic market with its cheap solar modules, is making domestic industry unviable.

According to him, currently the country has 3,100 mw of installed solar capacity of which 2,000 mw, which is more than 60 per cent, are in SEZs. Further, of the 8,300-mw of solar module manufacturing facilities, 3,800-mw are in SEZs.

 AISIA opposes Centres safeguard duty on imported solar panels and cells, fears negative impact on SEZ-based firms

Representational image. Reuters

"Hence, the indigenous manufactures situated in SEZ will come under the ambit of any blanket duty that will be imposed on solar cells and modules which will make them uncompetitive," he said.

In FY17, estimated demand of solar modules was around 6000 mw, which is expected to go up to 10,000 mw this fiscal.

"The purpose of duty should be to protect the domestic industry from dumping. Levying duty on domestic manufacturers can also lead to an increase in the cost of power that will discourage the domestic industry," he added.

He further said there is a need to revaluate the duty structures to ensure survival and growth of domestic industry.

Interestingly the call for import duty has comes from by the Indian Solar Manufacturers Association on behalf of five domestic producers — Mundra Solar PV, Indosolar, Jupiter Solar Power, Websol Energy Systems and Helios Photo Voltaic.

These companies want safeguard duty on 'solar cells whether or not assembled in modules or panels' immediately for four years.

Imports of solar cell increased from 1,275 mw in FY15 to 9,331 mw by FY17 while the domestic production was 246 mw in FY15 and is likely to increase to 1,164 mw in FY18.

Domestic players had a market share of 13 percent in FY15, which is estimated to decline to 7 percent in FY18.

The domestic industry also asked DGS for a provisional safeguard duty in view of the steep deterioration in the performance of the local players as a result of increased imports of the solar cells.

Safeguard duty is a WTO-compatible temporary measure that is brought in for a certain time-frame to avert any damage to a domestic industry from cheap imports.

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Updated Date: Jan 09, 2018 08:14:24 IST

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