Solar manufacturers allege massive dumping of Chinese products, want urgent safeguards

India might be committed to hitting its renewable energy target of 500 GW by 2030, but solar product manufacturers in India feel this cannot be achieved at the cost of energy security and domestic manufacturing.

In a strongly worded letter sent to union power minister RK Singh last week, the All India Solar Industries Association has called for ALMM (Approved List of Module Manufacturers) structural safeguards and tariff-based barriers (Basic Customs Duty & Safeguard Duties) besides production-linked incentives (PLI) for local manufacturers up to five years.

“Having been hopeful of revival for the last decade and survived strong headwinds, we are passing through even more difficult times where our survival is at stake,” the letter signed by the association, begins. “Without a robust local “Make in India” Solar manufacturing, the security of India’s energy sector is in peril,” it adds.

The association has said that the main cause of concern is the massive import and stockpiling of solar modules by local developers from Chinese manufacturers. What has exacerbated the situation is that local solar manufacturers’ factory capacities are reeling at just 30 percent.

Also Read | Bharat Serums acquires 26% stake in solar power firm

“Imports since April 2021 have been consistently over 800 MW per month, for 11 months till February 2022, which is 16 GW more than the rate of deployment of 10 GW, clearly indicating huge stockpiling & speculative activities,” the letter said.

The association has also alleged that developers and traders want to “sabotage” domestic manufacturing. “Nearly 3.21 GW of imports in February 2022 amplifies the plight of domestic manufacturers,” it said in its letter to the power ministry, “In fact, in the last six months (September 2021 to February 22), 11.93 GW of module imports clearly shows that developers and traders want to sabotage domestic manufacturing.”

The association has also pointed out that a total of $10 billion has been accounted for by foreign exchange outflow towards imports, which it calls a “huge and avoidable cost” to pay for energy security.

Worthy to note is that the union government’s ALMM safeguard kicks in from April 1, 2022, which is poised to protect the interests of local solar module manufacturers. However, the All India Solar Industries Association claims that intense lobbying from developers and traders is underway to delay the implementation of ALMM from the next fiscal.

Also Read | IEX expects green market activity to shift gears; imported coal price, LNG posing a challenge for power sector

“While the compulsory buying of modules from an approved list module manufacturers (ALMM) will be applicable to the private sector from April 1 onwards, these companies have now begun exerting pressure on the government to ensure that the ALMM safeguard is delayed,” said a senior member of the association, speaking to CNBC-TV18 on the condition of anonymity.

“It is painful enough for us that the ALMM, which should have been implemented in 2019, is being implemented only now,” the member added, “But any further delay will lead to further stockpiling of imported solar modules from ASEAN countries, which has happening unabated in the last six months.”

The solar industries association has alleged that Chinese manufacturers are capitalizing on FTAs (Free Trade Agreements) between India and ASEAN countries like Vietnam to set up kiosks in these geographies, and sell solar products to Indian importers. “So, even if BCDs and SGDs are imposed on solar modules, they aren’t effective beyond a period of two to three months,” said the spokesperson.

Atop the list of priorities for the solar industries association is to ensure ALMM is implemented by April 1. “I write with the earnest hope of expeditious action, and praying for no change in the implementation of revised ALMM order from April 1, 2022,” the letter states. “The Government has said they would look into it,” said the source from the association.

According to data from the All India Solar Industries Association, the equipment manufacturing industry has seen several companies shut shop as they have been unable to keep pace with Chinese imports.

Today, nearly 200,000 jobs are at stake and 125 solar manufacturing units run the risk of turning NPAs, which the association claims could throw could deal a body blow to India’s energy security.