The All India Solar Industries Association (AISIA) has urged Power and New and Renewable Energy Minister R K Singh to put in place structural safeguards and tariff-based barriers to help local manufacturing get a foothold and establish itself. Domestic (solar equipment) “manufacturers run their operations at 30% capacity and incur significant intolerable losses,” according to the group.
“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 jeopardy,” the body wrote in a letter sent to Singh earlier this week.
It was argued that for domestic manufacturing to gain a foothold and establish itself, structural safeguards (ALMM-Approved List of Models and Manufacturers) and tariff-based barriers (BCD/ SGD, etc. basic custom duty, safeguard duty) must be in place for 4 to 5 years before being gradually phased out.
They noted that since April 2021, monthly solar equipment imports have continuously exceeded 800 MW.
Imports totaled 16 GW in the 11 months leading up to February 2022, far above the rate of deployment and total installation of 10 GW, indicating massive stockpiling and speculative activity.
It further stated that 11.93 GW of module imports from September 2021 to February 2022 demonstrated that developers and traders want to destroy domestic manufacturing.
The group claims that a 3.21 GW import in February 2022 exacerbates the condition of indigenous firms.
It also stated that, based on the weighted-average price over the last three years and 32 GW of imports, the total outflow of foreign exchange has been USD 10 billion, which is a significant and needless cost to pay for energy security.
The organization also explained why China’s imports are continuing and the trade deficit with the neighboring countries is rising.
Import tariffs were proposed at 40% but were eventually reduced to 25%, then to nil, resulting in unrestrained imports, according to the report.
It further mentioned that a pass-through system ensured that no utility orders were routed through local manufacturers.
It stated that the Approved List of Models and Manufacturers (ALMM) is the only structural non-tariff barrier that effectively rules out unscrupulous moves such as circumvented supplies from Chinese manufacturers through shadow manufacturing and export from ASEAN countries with which India has a free trade agreement.
“We implore and pray for swift and urgent involvement to block any such devious moves by those interested in dumping Chinese products, which will result in dire consequences, including most units becoming NPA (non-performing assets) and some even going bankrupt,” it wrote.
The solar module is the most important component in the production of solar energy. Solar modules require a variety of smaller components and inputs such as solar cells, aluminum cases, glass, and back sheets, which are acquired from ancillary industries such as packaging and shipping.
According to the report, the Indian solar equipment manufacturing business has been hit hard by Chinese imports, resulting in some shops closing, liquidation, and survivors generally on the verge of bankruptcy.
It informed the minister that 200,000 jobs and 125 solar manufacturing plants are at risk of becoming non-performing assets (NPAs), posing a serious threat to India’s energy security.
The body requested “immediate action” and hoped for “no modification in the implementation timeline of the amended ALMM directive from April 1, 2022.”
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Resource: Economic Times
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