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.
With climate control initiatives becoming a necessity and greatly accepted by the countries, the world is feeling the urge to boost its efforts in renewable energy growth. Important initiatives that pave the way for clean energy growth are being highlighted and taken into consideration to maximize results. Innovative financial mechanism is one such element that can transform positive green energy building strategies into reality.
Driven by deteriorating climate conditions, failure to provide electricity to all (~1 bn people globally), and depleting conventional energy reserves, the world is now rapidly shifting towards green energy- mainly solar and wind. However, since energy generation through solar and wind are intermittent, there is a merit in thinking and taking active steps towards energy storage.
The way developing countries are aggressively investing in renewable energy, it is fair to state that energy storage industry will flourish within developing countries in near future. It is estimated that by 2035, developing nations will account for more than 80% of global growth in energy production and consumption. And energy storage will definitely play a major role in that scenario.
India reaching ~20 GW in solar capacity in 2018 from less than 3 GW in 2014 highlights a trend that has received ample support from Government of India and private players both. Precise and well-timed decisions to build a policy environment, increasing finance choices, and encouragement to entrepreneurs have helped this happen. However, recent investigation on imported textured, tempered glass (used to manufacture solar modules) imported from Malaysia by India’s Directorate General of Anti-Dumping and Allied Duties (DGAD) does not appear as an act favourable towards Indian solar growth.
Office of the Directorate General of Anti-Dumping (DGAD) presiding over the hearing of anti-dumping petition on 12th of December, can be considered another step in favor of domestic manufacturers towards demand creation within domestic industry. Domestic manufacturers have had a long history (nearly 5 years) of conflict against imported modules and cells.
While India kept practically doubling its solar capacity in recent years (from 5 GW in 2015- to ~16.6 GW in 2017), domestic solar manufacturers saw lack in demand creation. The industry being focused on importing solar modules, created an issue of capacity utilization of domestic manufacturers. In such a scenario, re-visiting the recent Anti-dumping issue in the solar industry can bring the results India desperately needs to become solar reliant.