India's final ruling on China-related photovoltaic products investigation is postponed again
India's final ruling on China-related photovoltaic products investigation is postponed again
On August 31, 2022, the Ministry of Commerce and Industry of India released the latest news that the final results of the anti-dumping investigation on photovoltaic cells and modules originating in or imported from China, Thailand and Vietnam, which were originally scheduled to be released on August 31, are again. Postponed until October 31st. The release of the final ruling has been repeatedly delayed. Is it firmly implemented or will it be rescinded? The elusive Indian government is also presumably stepping up its trade-offs.
In recent years, with the development of India's economy, due to the large amount of energy consumption and the unbalanced development of energy structure, local environmental problems have become more and more prominent. Under the global consensus on carbon neutrality, India's demand for renewable energy is growing, and the local photovoltaic industry maintains a strong momentum of development.
At present, India is the only photovoltaic market with a level of more than 10GW after China and the United States. As one of the major photovoltaic markets in the world, India has abundant light resources and unique conditions for photovoltaic development. The Indian photovoltaic industry has always relied heavily on imports. In order to get rid of the status quo, the Indian government has issued a series of support policies to stimulate the development of the domestic photovoltaic industry, including implementing various policies and financial incentive plans, setting certification restrictions, and establishing trade protection.
Policy and Financial Incentives: Stimulating PV Installation Demand
Policies and financial subsidies are important factors driving the rapid development of India's photovoltaic industry. In recent years, India's support policies for the photovoltaic industry have been successively introduced, which directly drives the development of domestic photovoltaic cell and component manufacturing.
In April 2021, the Indian government approved the Production and Manufacturing Incentive (PLI) program, pledging to invest 45 billion rupees (about 570 million US dollars) over five years to support the establishment of a 10GW photovoltaic integrated manufacturing plant and stimulate photovoltaic installed capacity demand. This year, the latest PLI plan has increased from 45 billion rupees to 240 billion rupees (about 3 billion US dollars) to promote the localized production of photovoltaic modules. It is not difficult to see the determination of the Indian government to vigorously promote the development of domestic photovoltaic manufacturing.
The Indian government believes that a large number of imported photovoltaic products will bring risks to the photovoltaic supply chain. The PLI plan for photovoltaic modules will encourage local companies in India to build large-scale photovoltaic manufacturing plants and help India gradually get rid of the status quo of relying on imported photovoltaic products. At present, more than 80% of the modules in the Indian photovoltaic market come from China, which is heavily dependent on Chinese imports. The Indian government has set a target of 100GW cumulative installed capacity of photovoltaics in 2022 (actually only 57.7GW as of June 30, 2022), but India's local battery production capacity is only 4GW and module production capacity is 18GW, which is far from reaching the market. need.
In fact, the Indian government has previously issued a number of measures to support the development of the domestic photovoltaic industry, but the progress is not as expected, and various practical factors still hinder India from completing the planned goals in a short period of time. The Indian government's PLI incentive plan is undoubtedly a shot in the arm for participants in the Indian photovoltaic industry. The PLI plans to limit the installed capacity of each bidder's photovoltaic projects to 10GW, which will allow more new players in the photovoltaic manufacturing industry to participate and create more employment opportunities. If the incentive plan is successfully implemented, it will also bring multiple positive impacts to the development of India's manufacturing industry, such as increasing government revenue, reducing import dependence, increasing export volume, and increasing employment.
Certification Restrictions: An Expensive Ticket to Enter the Indian PV Market
With the gradual growth of domestic photovoltaic installed capacity, India has become more and more strict in the quality control of photovoltaic products. Since 2018, imported photovoltaic products have been included in the category of compulsory certification and must pass the test of the Bureau of Indian Standards to obtain BIS certification.
Initiating trade protection: imposing defensive tariffs
In July 2020, the 15% safeguard duty expired, and the Indian side decided to extend the safeguard duty for one year to July 2021. In March 2021, the Ministry of Renewable Energy of India, MNRE, officially announced that it will impose a basic tariff (BCD) on all overseas imported photovoltaic cells and modules from April 2022, of which the tax rate for photovoltaic modules is 40% and the tax rate for batteries is 25%.
In May 2021, in response to an application by the Indian Solar Manufacturing Association (ISMA), India launched the third anti-dumping investigation against photovoltaic cells and modules originating in or imported from China, Thailand and Vietnam. The final result of the ruling has not been released before. The final ruling originally scheduled to be released in May this year has been repeatedly postponed, from May to August, and then to the latest October. Whether to implement the tax seems to be an issue for the Indian government. a great challenge.
India wants to protect the development of its local photovoltaic industry by imposing tariffs on imported photovoltaic products. But in fact, the introduction of the tax appears to have neither benefited producers nor encouraged new investment in manufacturing, but instead pushed up investment costs for PV players. After India implements basic tariffs, the additional tariff costs are unbearable for producers and local Indian manufacturers, and the cost can only be passed on by increasing product prices, which directly leads to a decrease in the import volume of photovoltaic modules in India and the progress of photovoltaic installations There will also be a slowdown.
But in the long run, photovoltaic power generation is an important part of India's development of renewable energy. Recently, several Indian "central enterprises" have also entered the photovoltaic industry, planning to build vertically integrated manufacturing plants, aiming to establish a local photovoltaic manufacturing base. Although various support policies, incentive plans, and trade protection policies have repeatedly been repeated, and there are many uncertainties, the Indian government itself has not wavered in its ambition to develop the local photovoltaic industry, and it is expected to continue to achieve a cumulative photovoltaic installed capacity of 100GW by 2022. target closer. Restricted by issues such as capital, technological development, talents, and raw material supply, India's photovoltaic industry has fallen behind its expected goals, and it is still difficult to get rid of its dependence on Chinese photovoltaic products. Overall, India is still a photovoltaic power generation market with huge development potential.
This article was originally created by EnergyTrend, a new energy network of TrendForce
