Solar panel makers may urge the government to impose a safeguard duty on Thailand and Vietnam as imports of the equipment from these Southeast Asian nations rose following a levy on China and Malaysia last year.
Developers have been routing solar cells through Thailand and Vietnam after India in July levied a 25 percent duty on imports from China and Malaysia for two years, according to solar equipment manufacturers BloombergQuint spoke to. Cheaper imports from China, according to energy consultant Bridge to India, caters to nearly 85 percent of India's solar panel requirements that helped power producers quote record-low tariffs in auctions. The levy increased project costs for solar farm developers and pushed up tariffs from record lows.
“We are evaluating options for making a new petition for including Thailand and Vietnam in safeguard duty because there's a law that a duty cannot be applied on developing countries unless exports from that country is more than 3 percent of the total imported products,” Dhruv Sharma, member of Indian Solar Manufacturers Association's governing council, told BloombergQuint over the phone. “Imports from Thailand and Vietnam have breached that rule.”
This comes at a time India's renewable energy sector is already beset with problems. India is looking to resolve operational issues to meet Prime Minister Narendra Modi's ambitious plan of installing 175 gigawatt of renewable capacity by 2022 as Asia's third-largest economy aims to reduce its reliance on fossil fuels to curb emissions.
Sunil Rathi, director (sales and marketing) at Waaree Energies Ltd., agreed. “The safeguard duty on China and Malaysia should have benefited Indian firms but developers are getting solar panels through Vietnam and Thailand, which is creating more problems,” Rathi said. The government, he said, has to take a decision against this.
Before the safeguard duty was imposed on China and Malaysia, solar panels worth $2 million and $1 million were imported from Vietnam and Thailand, respectively, in June last year, according to data available with the Ministry of Commerce. The imports rose to $11 million and $8 million from Vietnam and Thailand as of December 2018.
This prompted the industry to look at a long-term plan to protect the interests of domestic manufacturers, besides including exports from Vietnam and Thailand under the purview of safeguard duty.
“The government has to work on a long-term plan to impose anti-dumping duty on solar panels so that domestic manufacturers can get a respite,” Rathi said. “An anti-dumping duty in the range of 25-40 percent is fine.”
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