Anticipating the Indian government’s affirmative response towards protectionist pleas of the industry, PV companies in India are planning to expand module manufacturing capacity to 4 GW, as per Mercom (Source: Mercom India Research)
- Since the initiation of anti-dumping petition in India last year, 28 domestic and international PV manufacturers have announced capacity expansion plans in 2018
- All these announcements translate into a collective capacity expansion of 4 GW, according to Mercom's India Solar Manufacturing Tracker
- The companies are hoping that the Indian government will implement protectionist measures in the form of anti-dumping tariffs and safeguard duty
- Mercom believes that despite implementation of these measures, ASPs of Indian solar cells and modules have a long way to go before it can compete with those offered by Chinese players
- The tariffs, if imposed according to Mercom, must be substantial enough to help domestic manufacturing sector; otherwise much of this planned capacity additions will not be built
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A total of 28 domestic and international solar manufacturers in India have announced plans to expand their production capacity to 4 GW by February 2018, according to Mercom India Research’s India Solar Manufacturing tracker.
What’s inspiring them to ramp up production are the proposed protectionist measures in the form of anti-dumping duty and safeguard duty, according to Mercom India Research.
An anti-dumping petition from the Indian Solar Manufacturers Association (ISMA) had been doing rounds before the safeguard duty concern came into the picture. Earlier this month, ISMA withdrew the petition and is about to file a fresh one seeking an extension of investigation period (see ISMA Withdraws Anti-Dumping Petition).
Moreover, the proposed 70% safeguard duty, whose recommendation has come from the Directorate General of Safeguards, Customs and Central Excise, has been found by a parliamentary committee to have no valid ground (see No Reason For Safeguard Duties In India).
The local and international players that Mercom refers to, are putting their money on the hope that the Indian government will impose tariffs that would benefit local manufacturers. These 28 manufacturers have announced their capacity expansion plans since the initiation of the anti-dumping investigation, which officially started in July 2017 (see Anti-Dumping Investigation Begins In India).
However, Mercom points out that the ASP of Indian cells and modules cannot compete with Chinese players in India. There is a price difference of 10% to 15% between the two parties.
“Even with all these announcements, there is no guarantee that most of this proposed capacity will actually get built unless a substantial tariff is imposed on imported components and banks are willing to lend money to build solar manufacturing units,” said Raj Prabhu, CEO of Mercom Capital Group.
However, there are even vertically integrated Chinese PV module manufacturers now investing in India, like LONGi, which have much larger than Indian companies and have access to low cost wafer supply from China (see LONGi Plans 1 GW Cell/Module Factory In India)