Domestic solar equipment makers running plants at 30 pc capacity; reforms, tariff safeguards needed

The body highlighted that the (solar equipment) "domestic manufacturers run their plants at 30 per cent capacities and incur huge unbearable losses."

New Delhi: Industry body All India Solar Industries Association (AISIA) has urged Power and New & Renewable Energy Minister R K Singh that structural safeguards and tariff-based barriers are needed for domestic manufacturing to gain a foothold and establish itself. The body highlighted that the (solar equipment) "domestic manufacturers run their plants at 30 per cent capacities and incur huge unbearable losses." In the letter shot off to Singh earlier this week, the body stated that "having been hopeful of a revival in the last decade and after surviving strong headwinds, we are passing through even more difficult times where our survival is at stake and without a robust local 'Make in India' Solar manufacturing, the security of India's energy sector is in peril."

It urged that for domestic manufacturing to gain a foothold & establish itself, it is imperative that there are structural safeguards (ALMM-Approved List of Models and Manufacturers) and tariff-based barriers (BCD/ SGD etc. basic custom duty, safeguard duty) besides production-linked incentives for 4 to 5 years before these are tapered-off gradually. They pointed out that imports (of solar equipment) since April 2021 have been consistently over 800 MW/ month. The imports for cumulative 11 months till February 2022 is 16 GW, much more than the rate of deployment and total installation of 10 GW, which clearly indicated huge stockpiling and speculative activities.

It also pointed out that during the last 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. About 3.21 GW import in February (2022) amplifies the plight of domestic manufacturers, the body said. It also pointed out that considering the weighted-average price over the last 3 years, and 32 GW of imports, the total outflow of foreign exchange has been USD 10 billion, which is a huge and avoidable cost to pay for energy security.

The body also gave reasons for still continuing imports from China and widening the trade deficit with the neighbouring country. It stated that import duties were recommended for 40 per cent, which finally was lowered to 25 per cent and then to zero resulting in unbridled imports. It also pointed out that a pass-through mechanism made it sure that no utility orders come to local manufacturers.

The Approved List of Models and Manufacturers (ALMM) is the only structural non-tariff barrier to effectively rule out unscrupulous moves like circumvented supplies from Chinese manufacturers through shadow manufacturing and export from ASEAN countries with whom India has FTA (free trade agreement), it stated. "We request and pray for immediate and urgent intervention to thwart any such nefarious moves from those interested in dumping Chinese imports, leading to grave consequences, including most units turning to NPA (bad loans) and some may even nosedive to bankruptcy," it submitted.

Solar module is the key & essential element for solar energy generation. Solar modules require various smaller components and inputs like solar cells, aluminum case, glass, back sheets that are sourced from ancillary industries including those in packaging & transportation are dependent for their business survival. The Indian Solar Equipment Manufacturing industry has been reeling under an onslaught from Chinese imports, resulting in several closing shops, getting under liquidation and survivors mostly on the brink, it stated.

Today, at stake are 200,000 jobs and 125 solar manufacturing units which are becoming Non-performing assets (NPAs) and dealing a body blow to the security of India's energy sector, it told the minister. The body urged for "expeditious action & prayed for no change in the schedule of implementation of revised ALMM order from April 1, 2022."

PTI