Is India prepared to give up in the tariff war on Huaguang photovoltaic panels?

Tech 2023-06-10 08:19:09 Source: Network

Our reporter Yuan JirongFaced with the reality that over 90% of photovoltaic panels are imported from China, India's independent ambition in the new energy industry has not been able to bypass "Made in China". Reuters recently quoted three sources as saying that the Indian Ministry of Renewable Energy hopes that the Indian Ministry of Finance will approve its request to reduce the import tax on photovoltaic panels from 40% to 20%

Our reporter Yuan Jirong

Faced with the reality that over 90% of photovoltaic panels are imported from China, India's independent ambition in the new energy industry has not been able to bypass "Made in China". Reuters recently quoted three sources as saying that the Indian Ministry of Renewable Energy hopes that the Indian Ministry of Finance will approve its request to reduce the import tax on photovoltaic panels from 40% to 20%. According to sources, these two ministries also suggest reducing the commodity and service tax on photovoltaic panels by more than half.

With economic growth, India's energy demand has rapidly increased in recent years. In 2010, India formulated the "National Solar Energy" task to promote the development of solar energy. After the Modi government took office, the target for renewable energy power generation installed capacity set in 2014 was to reach 175 gigawatts by 2022, including 100 gigawatts of photovoltaic installed capacity, but this goal was not achieved.

According to data from the "Invest in India" website, as of March 31, 2023, the total installed capacity of renewable energy in India is 178.79 gigawatts, including 66.78 gigawatts of solar installed capacity. In the fiscal year 2023-2024, India plans to build a 40 gigawatts solar installed capacity. India's goal is to reduce carbon emissions by 45% and generate 50% of its electricity from renewable sources by 2030. Currently, India has approved the construction of 57 solar parks with a total installed capacity of 39.28 gigawatts. The Modi government has also set a photovoltaic installed capacity of 300 gigawatts by 2030.

Behind this ambitious plan, India has some unique advantages in developing the photovoltaic industry. Affected by the low latitude geographical environment and climate, India is rich in solar energy resources, with over 300 days of sunlight exposure per year, with an average of 6 hours of sunlight per day. The Indian government vigorously supports the local photovoltaic industry, and its photovoltaic enterprises also have certain independent innovation capabilities. Some photovoltaic enterprises have developed some photovoltaic products. Affected by this, India's photovoltaic industry has gradually formed a certain influence in the international market.

In the fourth quarter of last year, India's exports of photovoltaic products surged. Last year, India's total export of photovoltaic products reached 561 million US dollars, a year-on-year increase of 321%, with the United States as its largest market. According to survey data released by the Indian Ministry of Commerce recently, India exported $479 million worth of photovoltaic cells and modules in the first quarter of 2023.

However, despite significant progress, India's photovoltaic industry is largely dependent on photovoltaic product components produced in China due to the incomplete industrial chain. According to official data from India, in 2021 and 2022, the total value of India's imported photovoltaic panels reached 3 billion US dollars, with 92% coming from China. Some voices in India believe that excessive dependence on imports not only leads to an increase in the cost of the photovoltaic industry, but also poses a threat to India's energy security. For this reason, India has chosen to take action on Chinese photovoltaic panels. Starting from April last year, India imposed basic tariffs of 40% and 25% on photovoltaic modules and batteries imported from China and Southeast Asia, respectively.

But while weakening Chinese products, local photovoltaic energy giants in India are also facing equipment shortages. According to the analysis of Open Source Securities, over 80% of the components in the Indian photovoltaic market come from China. Compared to the target of reaching 100 gigawatts of cumulative photovoltaic installed capacity in 2022, India's solar cell module production capacity is only 15 gigawatts.

In order to reduce the dependence of the domestic photovoltaic industry on foreign products, India has successively introduced preferential taxes and a series of protective measures to support local enterprises, but these policies have not played their due role in the implementation process. Indian Electricity Minister Singh has stated that India's current photovoltaic module manufacturing capacity is insufficient to meet the country's demand for large-scale development of photovoltaic systems. To achieve Modi's goal of installing 365 megawatts of photovoltaic energy between 2031 and 2032, India is expected to import nearly 8 to 10 megawatts of photovoltaic panels annually in the next two years.

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