Solar

More

India lets PV duty deadline pass

India has quietly let pass a key date for deciding whether to impose anti-dumping duties on foreign PV cells and modules, having apparently decided domestic producers alone are not capable of meeting market demand.

This spring, under former Prime Minister Manmohan Singh, India’s Ministry of Commerce formally recommended that duties be put in place, claiming that an investigation showed that unfair competition from foreign suppliers had harmed India’s middling PV manufacturing sector, which includes players like Tata Power Solar and Indosolar.

The recommendation had further inflamed trade tensions between Delhi, Washington and Beijing, with US-based module supplier First Solar in particular having carved out a large share of the Indian market.

Shortly after the Ministry of Commerce made its recommendation, however, a new government under pro-business Prime Minister Narendra Modi came to power.

It quickly became clear that the new government was decidedly less keen to erect trade barriers for the solar industry, which Delhi sees as crucial to India’s future power sector and, indeed, broader economy.

Piyush Goyal, who replaced Farooq Abdullah at the top of the Ministry for New and Renewable Energy, has openly opposed the duties.

Normally the Ministry of Finance would have adopted the Ministry of Commerce’s recommendation pro forma, and it had until 22 August to do so.

Yet 22 August came and went, and as of 25 August no official announcement had yet been made – a course of action which was to be expected if the government decided to ditch the tariffs, according to experts.

At the core of the debate was whether India's domestic manufacturers -- and particularly in the realm of PV cells -- possess the wherewithal to keep up with the hoped-for level of demand over the next few years.

Delhi hopes India will build at least 5GW of PV capacity a year going forward, a fivefold increase on last year's performance.

In a sop to domestic producers, however, Goyal signaled last week that the government will begin requiring state-owned companies like power-generator NTPC to build utility-scale PV projects in India – and buy locally made kit to go in those projects.

NTPC announced last week it will build at least 1GW of PV capacity, and as much as 3GW, starting with a 250MW tender round next month.

Some independent power producers are concerned that such requirements, perhaps enacted through a Renewable Generation Obligation system, could crowd out smaller owner-operators, according to market researcher Bridge to India.

Latest