How the duty imposition on PV modules and Cells is to boost the domestic manufacturing capability?
The duty imposition on solar panels is aimed at boosting the domestic manufacturing capability in India. This move is intended to provide a level playing field for domestic manufacturers to compete with Chinese players in the solar panel market. Currently, domestic modules trade at a discount of 7-10% to global counterparts, which puts them at a disadvantage.
By imposing a duty on cells/modules and introducing other supportive schemes, the government can provide the much-needed price parity for domestic manufacturers. This will enable them to produce solar panels at a competitive price, which will help them to gain market share.
China currently has more than 500GW of module capacity and continues to dump its highly unutilized cells/modules in India, giving stiff competition to domestic players. To counter this, the Indian government believes that domestic players will add 37GW of capacity (12GW integrated + 25GW of cell/module) at an investment of INR730-750bn. This will raise their share in the country’s solar market to ~40% by FY26, up from 10% presently.
This move will also benefit EPC players like Tata Power, Adanis, Borosil Renewable, and ReNew, who are actively investing in solar power projects in India. The duty imposition and incentives will help them to reduce their dependence on imported solar panels and promote the use of domestic panels.
Advantages of Duty Imposition on PV Modules and Cells:
| Advantages | Details |
|---|---|
| Boost to Domestic Manufacturing Capability | Duty imposition and other supportive schemes will provide price parity for domestic manufacturers to compete with Chinese players, thereby boosting domestic manufacturing capability. |
| Increased Capacity | Domestic players are expected to add 37GW of capacity (12GW integrated + 25GW of cell/module) at an investment of INR730-750bn, which will raise their share in the country’s solar market to ~40% by FY26. |
| Assistance to EPC Players | Duty imposition on cells/modules and other supportive schemes will assist EPC players like Tata Power, Adanis, Borosil Renewable, and ReNew. |
| Level Playing Field | Duty imposition on Chinese modules will create a level playing field for domestic players, who currently trade at a 7-10% discount to global counterparts. |
| Protection Against Dumping | Duty imposition will protect against dumping by China, which has more than 500GW of module capacity and is expected to continue dumping its highly unutilized cells/modules in India. |
In conclusion, the duty imposition on solar panels and other supportive schemes will help to amplify the domestic solar equipment industry in India, making it more competitive in the global market.