Thanks to the demand from the flourishing solar industry, the Government of India is considering not to impose huge anti-dumping duties on foreign made solar panels, says a recent report in Economic Times.
The government feels the cost of imposing such duties could be higher compared to the benefits.
India, which is emerging as one of the biggest markets for solar energy, will require millions of solar panels each year. Currently Indian manufacturers do not have the scale to meet the demands of the industry. Indigenous solar panels are often disregarded as they are not competitive with foreign panels in terms of cost and quality.
The decision by the government is likely to receive disapproval from Indian manufacturers. Recently a consortium of around 25 Indian solar makers who are active members of the Indian Solar Manufacturers Association (ISMA) appealed to the government demanding 30-35 percent anti-dumping duty on solar cell imports.
Reports suggest that Indian solar producers are now far behind in technology, size and costs compared to the players from China, USA and Taiwan. The recent exit of Moser Baer demonstrates that manufacturers are struggling to move their business up the value chain in the current crisis.
The ongoing crisis in Indian solar panel industry is partly attributed to the flaws in policy making. Several Indian states allow free imports of solar panels, paving the way for solar imports at cheaper rates.
The government is mulling the option to facilitate solar imports as it would allow the market to grow fast, and help the country address the energy crisis. According to sources in Renewable Energy Ministry, the cost of solar power production could go up by at least Rs 1.6 crore per MW if anti-dumping duty is imposed on foreign panels.