For a long time, India has imported most of the solar cells and modules from China. In order to support the local manufacturing industry, reduce dependence on imported products, and increase the competitiveness of its domestic modules, in July 2020, the Ministry of Finance of India issued a notice to impose a safeguard duty (SGD) on imported solar cells and modules from July 2020. From January 30 to January 29, 2021, a safeguard duty of 14.9% will be imposed on all solar cells and modules imported from China, Thailand and Vietnam, and 14.5% will be imposed on the above-mentioned imported goods from January 30, 2021 to July 29, 2021. Guarantee tax.
At present, the SGD policy has expired on July 29, 2021, and the new basic tariff on solar modules, BCD-40% tariff on photovoltaic modules and 25% tariff on photovoltaic cells, will be implemented on April 1, 2022. Means that Chinese photovoltaic modules in the Indian market will usher in an eight-month tax holiday. At present, the Indian government has not yet made a statement on whether to extend the SGD tariff policy.

The project developer hopes to cancel the safeguard tariff to speed up the project construction and grid connection

Currently, the cost of solar modules in India accounts for more than 50% of the total project cost. According to Crisil Ratings, since March 2020, 12 GW projects have been bidding at a low price of less than Rs 2.50 per unit. Project developers usually purchase related components 9 to 12 months after being auctioned. As these projects approach the component procurement stage, prices have risen sharply. When the purchase price is much higher than the bid expected price, the project’s rate of return will drop, which may lead to certain Some projects are postponed or abandoned.

It is reported that the price of modules has soared to US$0.24 per watt in June, a 10% increase since January. Indian solar developers said that due to rising prices, the progress of project construction has slowed down. An executive member of the Rajasthan Solar Energy Association said: “Due to the 30%-40% increase in module prices, many projects are progressing slowly. The projects are tendered to maintain a certain profit, but when the module prices rise by 40%, the project benefits The rate has been negligible. I hope that the cancellation of the guarantee tax will speed up the process of project construction and grid connection."

Indian manufacturers want local government to formulate temporary tariff measures

Unlike project developers, Indian solar manufacturers want the government to introduce a temporary tariff before the BCD policy takes effect. Many people believe that without this protective measure, it will be difficult for local manufacturers to have greater room for development. At present, more than 80% of India's solar modules are imported from China, and its domestically produced modules are at a disadvantage in competition due to higher prices.

Bharat Bhut, co-founder and director of Goldi Solar in India, said, “Previously, local manufacturers could focus on items with procurement needs. Now, there is no temporary tariff policy, which gives imported solar modules the opportunity to sell at a lower price.”

Tax holiday is crucial for developers to purchase solar modules

As the price of silicon materials continues to rise this year, and the prices of cells and modules have also increased, Chinese module manufacturers have been unable to implement the contract content at the prices they signed with Indian photovoltaic developers in the early days. Chinese suppliers such as Longi have already cooperated with Indian photovoltaic developers. Price negotiations were conducted. If temporary tariff measures are implemented, the prices of cells and components will continue to rise, and the project yield will be further reduced. Many previously signed projects will face the risk of abandonment, delaying India's goal of achieving renewable energy.

If there is no provisional tariff policy, Indian EPC companies may purchase relatively cheap and high-efficiency photovoltaic modules for this window period. The total export volume of Chinese photovoltaic modules to India may increase in the next eight months.