India’s solar industry may boost because of Trump’s solar module tariff. US President Donald Trump has recently levied tariff on imported solar panels. Indian solar power sector may benefit from his decision.
Trump, who has been always passionate about developing American manufacturing ahead, imposed 30% tariff on imported solar cells & modules in first year, later on declining t0 15% in 4th year. This will surely hit the Chinese module manufacturers. Though, Trump had a relaxation of importing up to 2.5 GW of unassembled solar cells per year. In every solar project the cost of modules account for at least 60 percent of the total cost.
India is also carrying out an anti-dump investigation on solar equipment from China, Taiwan and Malaysia. In addition to this, India is also working on imposing an extra 70% provisional safeguard duty on Chinese and Malaysian solar panels. The proposition was made by directorate general of safeguards when a group of domestic solar panel manufacturers approached him. Though, government has not yet approved any of these decisions and the debate is yet on.
Robert Lightizer, US Trade Representative, finally made the announcement that President Trump has approved all the recommendations to levy safeguard tariffs on importing large residential washing machines along with solar cells and modules.
In September, USITC unanimously voted to conclude that the cheap imports from China and Malaysia are harming American manufacturers.
Indian Prime Minister Narendra Modi at Davos raised the issue of decreasing shine of globalization. He added that rather than globalization. Protectionism is gaining pace. This practice is resulting in new tariffs and non-tariff barriers.
The decision by US president comes after US has withdrawn from the Paris climate agreement. We will be able to see the effect of this decision in the form of reduced prices of Chinese solar modules because manufacturers will try to allure the Indian solar panel buyers. Chinese manufacturers will lose a significant market, US.
Indian solar developers are earnest about this development. They are happy as the decision will reduce the price of solar modules significantly.
Looking at the Chinese solar module manufacturers’ market, the major contributors are US, India and China itself. China manufactures around 70GW capacity of solar modules every year. As US is slowing down its green energy activity, Chinese solar manufacturers will lower the prices to drive demand. Surely, it will abase India in reaching the 100GW solar capacity goal by 2022.
However, other popular beliefs say that the real impact will be seen on India’s trade investigation process.
Some say that there won’t be any big impact on international demand, supply or prices. US accounts for only 12% of global solar demand. If 15-20% of this demand gets deducted then, it will be a 2% fall in global demand only. The interesting impact will be on Indian trade investigation and decision process. There won’t be much impact on India because of US’s decision to levy duty on imported solar panels as US does not import much from China.