July 16, 2018, India's General Directorate of Trade and Relief, a formal proposal for a solar cell safeguards survey: A two-year defensive tariff on PV modules and batteries in China and Malaysia. The resolution is still at the proposed stage, and formal implementation requires the Ministry of Finance to decide.
If the current programme is implemented to increase 15-25% tariffs, the Indian project is still economically available, and the future trend of growth in the Indian market will not be affected, but may have a phased impact on the rate of growth potential.
The following is the analysis of this article
1. The current policy is at the proposed stage and remains awaiting the relevant sectoral resolutions. July 16, 2018, India's General Directorate of Trade and Relief (safeguardinvestigation) made a formal recommendation for a two-year defensive tariff on exports of photovoltaic modules and solar cells from India to China and Malaysia (
Safeguardduty), in which the first-year tax rate was 25%, the second year was 6 months earlier, and the next 6 months dropped to 15%. India's PV dual anti-defensive tariff resolution process is rather complicated. First, the Indian Photovoltaic Manufacturers Association launched an investigation, the Indian Bureau of Trade and Relief based on the findings of the recommendations, that is, the current status. The proposal will then have to be heard by a committee of departments, such as the Department of Energy, the Ministry of Commerce, and the Ministry of Industry, to discuss whether the recommendation is implemented and whether tariff rates need to be adjusted. The results of the trial were sent to the Indian Ministry of Finance ruling that the Ministry of Finance will be formally established after the final cut.
The current resolution is in the State of the recommendation of the General Directorate for Trade Relief, and it remains unclear whether the Commission's trial and the ministry's decision.
2. No clear implementation time node has been introduced, the fastest implementation of October 1. The India General Directorate for Trade and Relief did not point out the explicit time-of-execution node in its recommendations. According to the process of the previous investigation, if the proposal is passed, the policy will be implemented quickly after the finance department's final cut.
India's stakeholders predict that if the policy is passed, it will be implemented as soon as October 1, with about 3 months left.
3. The implementation of policies remains doubtful
Many of India's previous policies, such as double-counter, temporary tariffs, customs duties, and so on, have largely ended in the past, speculating on the implementation of India's trade protection policy, which is still likely to be lifted and the possibility of imposing a variable.
Insufficient capacity for duty-free components
Indian market component prices have risen India's current home-grown battery capacity and capacity from other countries to be protected from this policy are far from satisfying India's market needs. India currently has a home-grown battery capacity of about 2.5GW. As in this proposal, "except China and Malaysia, other developing countries import components must not exceed India's total imports of 3%, batteries shall not exceed the total import volume of 9%," the provisions of Vietnam, Thailand's total of nearly 10GW of cell production capacity is also unable to contribute much to the Indian market, far from meeting India's overall annual demand for more than 10GW components.
The duty-free capacity is much less than the actual demand for India's 100GW target.
If the policy is implemented, the tax-free component capacity is insufficient, and the remaining capacity increases and taxes may lead to an increase in the real price of the Indian market components, which has a definite impact on the project IRR.
India's market price is low, the levy is not very large
Chinese component exports still have advantages
1. Low market price in India India's market entry barriers are low and prices have been low, far below those in Europe and America, below some other Asian countries.
Chinese companies to print shipments mainly to improve capacity utilization, the Indian market is not a major profit contribution zone.
Average price of global major country components in the first half of 2017-2018
June 2018 Major PV Enterprises exports of India accounted for
2. Tariff levy is not large, China's component exports still have advantages Even if the policy is implemented, tariffs will be very limited in price increases, and exports to India are still economic. Taking the bid price of the latest solar auction project in Andhra Pradesh, India, 2.70-2.71 Indian rupee/kwh (0.0391-0.0394 USD/kwh) as an example, the model of the Indian Project product group, according to the first year 25% tariff,
A rough calculation of the price of the components during the 2018.10-No. 2019.9 period results in the following data. With the lowest bid price of 0.0391usd//kwh as a reference, according to the first year higher 25% tariff calculation, in two different projects, the price of tax-included components are 0.3usd/w and 0.28usd/w, the project IRR reached 6.96% and 9.38% respectively.
The internal rate of return for projects exported to India can still be maintained at a higher level, with a certain margin of profitability.
