Safeguard Duty no Help for Local Solar Cell Manufacturers

Safeguard Duty no Help for Local Solar Cell Manufacturers
03/01/2019 , by , in ALLIED

The 25% safeguard duty imposed on imported solar components, meant to support domestic manufacturers, has not done cell producers any good, although module makers have fared better.

“We’ve got zero orders since the duty became applicable,” said the chief executive of a solar cell company, requesting anonymity. “Our factory is still shut. We are surviving with great difficulty.” Solar cell manufacturers said even with the duty, their products remained more expensive. They had suggested a safeguard duty of 70%, but following an uproar by developers, the duty was reduced to 25%.

“If you require a certain price to break even, raising the competition’s cost to half of that doesn’t help,” said Dhruv Sharma, chief executive of cell manufacturing company Jupiter Solar. “We are operating at 40% capacity. If things don’t improve soon, we will definitely be heading to the National Company Law Tribunal (declaring bankruptcy).”

With safeguard duty, the cost of an imported solar cell is about 12 cents. Indian manufacturers are being forced to sell at that price, too, though their input cost is 13.5 cents per cell.

About 90% of panels and modules used in Indian solar projects are imported because they are cheaper.

The safeguard duty was levied by the Directorate General of Trade Remedies, acting on a complaint by local manufacturers that imported equipment was causing their business “serious injury” and they were unable to compete with Chinese and Malaysian rivals on price.

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