Under the leadership of Hon’ble Prime minister Shri Narendra Modi, our government’s strategies and multi-pronged operation sequences for ‘Make in India’ initiative has given Indian solar industry hope for new opportunities. The initiative was expected to bring more investment, job opportunities, and a platform for technology upgradation in the promising industries, especially solar sector.
Make in India initiative was supposed to give a long term policy direction with large scale deployment goals, increased spending on R&D, domestic production of critical raw materials across the value chain, and to have focus in development of components and products within the country to mass manufacture and control supply chain of lucrative sectors like- Solar.
Director General of Trade Remedies (DGTR) initiated Safeguard Duty investigation on import of Solar Cells, whether or not assembled in panels or modules in December 2017. The Director General of Trade Remedies in its preliminary findings recommended to impose 70% safeguard duty on imported solar cell and modules imported in India. Recently Committee of Secretaries decided to not impose Safeguard Duty based on preliminary findings and it decided to take call on duty once DGTR releases it’s final findings. However, we should evaluate the scenario that will unfold if the duty is imposed.
Safeguard Duty: A Boon or Roadblock?
Indian solar industry is growing and the consistent progress portrays the Government initiatives in a bright light. However, the industry is still at a nascent age and requires constant support in development of a favourable environment for growth. And although, protecting domestic manufacturing industry seems to be the right move (Domestic players had a market share of 13 per cent in FY15, which is estimated to decline to 7 per cent in FY18), we have to understand that blanket Safeguard duty could lead to counterproductive results.