India: Unclear if import duty will be imposed on PV modules


While the Indian Ministry of New and Renewable Energy, MNRE, has not come out with a specific yes or no, it has kept the industry in a limbo over whether or not duties will finally be imposed on imported photovoltaic products.

Speaking to pv magazine, DR. B. Bhargava, director of PV and solar thermal at the MNRE said, "I wouldn’t be able to comment [on whether the] government has ruled out imposition of customs duty on imported solar modules, as MNRE has not come out with any decision or statement on it."

Indian module and cell manufacturers have been seeking duty protection from MNRE against cheap imports. These manufacturers allege that the selling of Chinese modules at such cheap prices is tantamount to dumping.

Just two days ago, various media outlets reported that India is considering following in the footsteps of the U.S. and launching its own investigation into Chinese solar imports. This has since been disputed, however, in other media reports.

Mohit Anand from Bridge to India, however, told pv magazine, "The Indian manufacturing industry cannot match the price competitiveness and technological advantage of any leading international manufacturers at the moment – be it American thin film manufacturers or Chinese crystalline manufacturers.

"Agreed that Chinese module manufacturing is subsidized and this gives them a significant advantage. But, the reason for Indian manufacturers being uncompetitive goes beyond the fact that they pay duties on raw materials. Even if these were brought down, or duties on imported modules were increased, Indian manufacturers would remain uncompetitive as, given their current business models, neither can they be price leaders nor cost leaders in the market."

Overall, there are around five dozen photovoltaic module manufacturers in India, ten of whom also make cells for the solar industry. Cumulative production capacity stand at 1.7 gigawatts (GW).

Although there are currently around one GW of solar plants under various stages of construction, Indian producers say they are running at less than half of their production capacities, as a result of cheap Chinese module availability in the Indian market. In a recent report from Bridge to India, it was additionally found that based on the current supply contracts signed, over one GW of modules will be imported into India by the end of 2012. "More than 60 percent of these will be for thin film modules, all from foreign manufacturers," it says.

This reality has led some of India's producers to question whether the INR 800 billion National Solar Mission is meant for Chinese companies, in an open letter to ministry of renewable energy.

Responding to how Indian producers are able to survive in such conditions, Bhargava replied, "Most of the Indian manufacturers commenced operations or added capacity in view of the European market. As the European market has declined these [Indian] manufacturers should try to look for alternative markets. There is a huge potential in the off-grid PV segment in India. Indian manufacturers should look to cater to this segment."

Bhargava refused to comment on the timeline of 100 percent indigenization of components for solar industry in the country. He said, "We are evaluating the market and will come out with some policy decision at the time of announcement of second phase of JNNSM."

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