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Indian government rejects plea seeking imposition of import duty on finished solar equipment

According to reports, the government says it has no objections to imports of low-priced Chinese  solar cells as long as they meet prescribed quality standards.

This comes as a setback to domestic manufacturers battling cheaper Chinese imports. Last week, the government rejected a plea of domestic players seeking imposition of import duty on finished solar equipment.

“The market will always bend towards the products which are low-priced. But, yes the quality matters,” said Tarun Kapoor, joint secretary, ministry of new and renewable energy. The Indian government’s stand is in contrast with the  US policy, which has taken China to the  World Trade Organisation over dumping of solar cells and panels.
Kapoor, however, said, “We support what is legal, this is a case and we support WTO-accepted norms. It is not country specific, it’s rule specific.” India’s  National Solar Mission gives preference to domestic manufacturers. However, this is only at the central level and states are not obliged to follow this policy. “There’s only one scheme that offers this provision and it’s not a law,” Kapoor said. “We give the projects to developers who in turn are free to choose the products. If the prices are low and quality is good, then obviously, anyone would go for it.”

“Why should we as a nation help strengthen other international manufacturers when our own domestic players are fledgling?” asked Vivek Chaturvedi, chief marketing officer, Moser Baer Solar Ltd, a leading manufacturer of solar equipment. At present, India’s solar cell and module capacity is around 700mw and 1,000mw, respectively. Industry expects the demand to grow to 3-5 gigawatts annually in six years.

Ministry officials though inform that it’s the thin-film technology in the solar cell market that is facing more threat, which often come with vendor-tied foreign financing. “Given that over 90% of the installed global solar cell capacity is based on the more reliable crystalline silicon technology, the government may well consider further extending the domestic content requirement to sustain the momentum of solar manufacturing in the country,” said Rupesh Agarwal, Advisory Lead – Cleantech at Ernst & Young.

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