Industry body All India Solar Industries Association (AISIA) has urged Energy and New and Renewable Energy Minister RK Singh to say that structural safeguards and tariff barriers are needed for domestic manufacturing to gain a foothold and settle down. The body pointed out that the (solar equipment) “domestic manufacturers are operating their factories at 30% of their capacity and are suffering huge unbearable losses”.
In the letter sent to Singh earlier this week, the organization said that “after hoping for revival over the past decade and surviving strong headwinds, we are going through even tougher times where our survival is at stake and without strong local ‘Make in India’ solar manufacturing, the security of India’s energy sector is at risk.”
He insisted that for domestic manufacturing to gain a foothold and establish itself, it is imperative that there are structural safeguards (ALMM-Approved List of Models and Manufacturers) and tariff barriers (BCD/SGD, etc. ., basic customs duty, safeguard duty) in addition to production-related incentives for 4-5 years before these are gradually reduced.
They pointed out that imports (of solar equipment) since April 2021 have been consistently above 800 MW/month.
Imports for the cumulative 11 months to February 2022 are 16 GW, well above the total deployment and installation rate of 10 GW, clearly indicating huge storage and speculative activity.
He also pointed out that in the past 6 months, from September 2021 to February 2022, 11.93 GW of module imports clearly showed that developers and traders want to sabotage domestic manufacturing.
The import of about 3.21 GW in February (2022) amplifies the plight of domestic manufacturers, the body said.
He also pointed out that given the weighted average price over the past 3 years and 32 GW of imports, the total outflow of foreign exchange was $10 billion, which is a huge and avoidable cost to pay for the energy security.
The organization also gave reasons for continuing imports from China and widening the trade deficit with the neighboring country.
He said import duties were recommended for 40 percent, which were eventually lowered to 25 percent and then zero, leading to unbridled imports.
He also pointed out that a pass-through mechanism ensured that no utility orders reached local manufacturers.
The Approved List of Models and Manufacturers (ALMM) is the only non-tariff structural barrier to effectively exclude unscrupulous moves like circumvented sourcing from Chinese manufacturers through parallel manufacturing and exporting from ASEAN countries with whom India has an FTA (free trade agreement), he said.
“We demand and pray for immediate and urgent intervention to thwart such nefarious actions by those interested in the dumping of Chinese imports, resulting in serious consequences, including most units turning to NPA (bad loans) and some may even go bankrupt,” he said. .
The solar module is the key and essential element for the production of solar energy. Solar modules require various smaller components and inputs such as solar cells, aluminum casing, glass, back sheets from ancillary industries including packaging and transportation, which depend on the survival of their business.
India’s solar equipment manufacturing industry has been rocked by Chinese imports, leading to several stores closing, liquidation and mostly survivors on the brink, he said.
Today, 200,000 jobs and 125 solar generating units are at stake becoming non-performing assets (NPAs) and dealing a major blow to the security of India’s energy sector, he told the minister.
The body called for “swift action and prayed that no changes would be made to the timeline for implementing the revised ALMM order from April 1, 2022.”
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