The Directorate General of Trade Restrictions (DGTR) under the Ministry of Commerce and Industry of India made the above recommendations in a report to the government.
The Times of India reported on the 16th that this proposal is in line with the demands of many Indian solar manufacturers. They believe that the massive importation of solar panels from China and Malaysia by developers has caused “harm” to them.
According to the DGTR report, China's exports of solar panels to India accounted for 1/5 of total exports in the first half of 2016 and rose to 2/5 in the second half of the year. “China has begun to actively target the Indian market”.
According to the report, the solar panel industry in India has been affected by the surge in imports of related products, and the market share has been decreasing. From 2014 to 2018, the proportion was 10%, 4%, 8%, 7%. "Protective tariffs can prevent imported solar panels from completely eroding the production base of China's solar industry."
However, this protective tariff is tantamount to an Indian developer who relies on imported solar panels.
Sunil Jain, head of renewable energy development company, said: "This will increase the tariff on solar panels by 54 Paisa (100 Pasha = 1 Rupee), and the product per unit will rise from 2.50 to 2.75 rupees to more than 3 rupees."
About 90% of solar panels in India are imported from China and Malaysia, as imported equipment is 25% to 30% lower than local equipment.
Some Indian industry experts have strongly criticized the DGTR's proposal. "This decision, although largely in line with the expectations of protecting domestic manufacturers, will cause serious damage to the entire industry and will also affect the Indian government. The vision for the solar program," said Vinay Rustagi, head of the Indian Solar Consulting Group.
The Times of India reported that the Indian government intends to achieve 100,000 megawatts of solar power by 2022. Reuters reported that India plans to increase the generation of renewable energy from 20% to 40% by 2030.
“It doesn’t make sense to collect taxes for two years, because this time is too little for the recovery of domestic industries. The most losses are those developers who rely on imported products,” adds Vinay Rustagi.
Reuters quoted the China Chamber of Commerce for Import and Export of Machinery and Electronic Products as saying that "the real cause of damage to India's domestic solar industry is that Indian producers adopt aggressive pricing rather than imports."
Bloomberg quoted Zhang Sen, secretary-general of the photovoltaic product production department of the Chamber of Commerce, as saying that "if the order is implemented, it will cause harm to Indian buyers and Chinese manufacturers who pay high tariffs."
However, the report also stated that there is room for negotiation before the Indian Ministry of Finance officially adopts this proposal.
Indian Finance Ministry spokesman D.S. Malik said the DGTR's recommendations will come into effect once they are published in the official Gazbar of India, the official record of the Indian government. Ministry of Commerce spokesperson Monideepa Mukherjee did not immediately respond to an email from Bloomberg for comment.
At present, the Times of India stated that representatives of enterprises from China, Taiwan, and Malaysia, as well as representatives of the Chinese Embassy and the European Commission, have made representations to the DGTR against this protective tariff.
This is not the first time India has proposed raising tariffs on imported solar equipment.
As China's largest importer of solar energy equipment, the General Directorate of Safeguards of India first proposed a 70% protective tariff in January this year to protect its solar industry. At the time, this resolution was not passed.