WORRIED ABOUT INDIA'S SAFEGUARD TARIFFS?IN FACT, THE EU'S LOOMING DUOPOLY WILL HAVE A BIGGER IMPACT2018.09.07 14:38
Overall, the impact of the proposed India safeguard tariff will be limited and not sufficient to protect local photovoltaic products, according to TrendForce, an analysis firm. In the short term, however, the tariff incidents will lead to price fluctuations in photovoltaic products and increase costs for large project developers. Compared with the 5.97GW installed in the first half of 2018, the solar energy demand in the Indian market will decrease by 2-3GW in the second half of this year, and the total demand in the 2018 fiscal year will be between 8-9GW.
TrendForce said India's current manufacturing capacity for photovoltaic modules is 3.2GW and cannot meet domestic demand, which is why it relies on imports.
Among the importing countries, Vietnam's component manufacturing capacity is 7.2GW, 6.5GW in Malaysia, 1.8GW in Thailand and 800GW in Turkey. Overall, Chinese imports accounted for more than 80 per cent of India's solar demand in 2017.China remained India's biggest importer until May 2018, but sales fell 19.6 per cent.
In terms of price, component prices in India are currently in the range of 0.25 to 0.27 us dollars per watt, lower than in other markets. "China's first-tier manufacturers are more willing to prioritise markets outside India because of price," says TrendForce.
"The difficulties faced by second-and third-tier Chinese suppliers dependent on exports to the Indian market will be further exacerbated by protective tariffs as a result of the adverse situation in the Chinese market, which will lead to further market price volatility."
The negative reaction
Earlier this week, India's trade relief agency (DGTR) proposed a two-year safeguard tax on solar cells and components imported from China and Malaysia at a rate of 15-25 per cent.
Overall, the market reaction has been relatively negative. Industry observers say the proposed move could hamper India's ambitious solar programme, raising the country's solar costs by 15-30 per cent.
Some analysts and companies in India say the proposed two-year guarantee is too short to deter any investment in new solar manufacturing capacity. Moreover, for solar developers, it poses a direct threat to the feasibility of ongoing projects.
Eu MIP decision
However, the expected greater impact on the Indian solar market is the EU's current minimum price commitment (MIP) for Chinese pv importers, which expires on September 3.
If MIP expires, TrendForce expects suppliers in Vietnam and Thailand to fill the gap left by Chinese exporters in India, with the rest concentrated again in the EU. In this case, competition will intensify, component prices continue to fall, and the growth of non-subsidized pv projects may be stimulated. Third party suppliers, on the other hand, will be shipped to India and the EU, "creating fierce competition for Chinese suppliers in India".
Initially, MIP will expire in March 2017.But it was extended by 18 months. The latest news is that a new MIP commitment review request has been submitted to the European commission. If confirmed, the request could prevent existing anti-dumping and countervailing duties from expiring on September 3.
In fact, most people in the European Union's solar industry oppose tariffs. In a recent letter to European commission President jean-claude Juncker at the end of May, more than 250 organizations and companies from EU member states called for an end to trade restrictions on Chinese photovoltaic manufacturers.