Anti-China trade tariffs threatens Indian solar boom

Over the past centuries, the relationship between India and China has been of strain. The June clash took place at the northeastern region border-left 20 Indian militaries dead, which extended into a whole-blown trade rivalry.

In the last two years, India started to impose anti-dumping policies to provide security to its confined solar makers from affordable Chinese imports. Currently, Indian authority has doubled down with a recent series of custom duties on cells as well as components bought from China and Malaysia. 

As stated by the Power and Renewable Energy Ministry, Indian’s strategy is to compel solar components up to 25 percent and a 15 percent duty on cells during the start of the year. The government plans on escalating them to 40% and 30% in that order by 2021. Those penalties were intended to start working following the expiration of the new policies. The authority decided to extend the current security duties to an additional year, technically taxing all imports in a double way. 

The main aim of the strategy is to sift India off its reliance on Chinese goods and allowing Indian manufacturers to occupy the left space. 

India plans on attaining 100GW of solar capacity in the next two years. By the end of March this year, India had already installed 37GW of solar energy. Experts have been filled with worries that quick, short term policies will pose a threat to manufacturers and developers, resulting in slow progress in India.

In a statement, Subrahmanyam Pulipaka, Chief Executive Officer of the National Solar Energy Federation of India (NSFEI), stated that Indian authorities should draw its focus on long term approaches. In case there is no any useful energy evolution that lacks dependence on the imports. 

According to statistics given by Mercom India, a research firm in India, in the last three months of the previous year (2019), 85% of all solar components and cells were bought from China, 5.5% from Vietnam, and 4% from Thailand.

The rate at which India relies on China is to intimate that manufacturers cannot replace imported items with homemade technology in just two years. Foreign investors have drawn much interest towards Indian Solar installation, and the contrary, India does not seem to have the same attraction of that particular energy interest.