70% Safeguard Duty Proposed on Imported Solar Power Systems in India

Imports of solar modules from all countries except developing nations like China and Malaysia could be subject to a 70% safeguard duty in the upcoming months. India’s Director General of Safeguards (DSG) made this proposal after a petition submitted by Indian Solar Manufacturers’ Association , stating that cheap imports were hurting jobs and profits for domestic manufacturers.

If the proposal is accepted it will halt the government’s progress towards installing 100GW solar by 2022. Though there appears to be a tussle between ‘Make in India’ and cleaner energy, similar to the age old trade-off between growth and sustainability, that isn’t actually the case. An import duty may help domestic manufacturers but at the same time it will affect the livelihood of thousands of people employed in the design, construction and operation of solar plants because of cheap imports.

Projected Effects of Safeguard Duty

  1. Delay in reaching renewable energy targets
  2. Increase in tariffs by 17-35%(INR 0.45 – 0.90/kWh)
  3. Uncertainty around power purchase agreements that have already been negotiated

It appears that a decision on this front will be taken in the next 4-6 weeks, wherein the hope is that the duty will be prospective in nature and that it will not affect ongoing solar projects. For a more detailed analysis of the proposed duty, read the following post by renewable energy consultancy Bridge to India.

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