New Delhi: India’s economic response against Chinese border transgressions is playing out in the solar space, with certification and testing approvals for imported solar equipment from China hanging fire due to inordinate delays by the Bureau of Indian Standards (BIS), said two people aware of the development.
This approval is necessary to be eligible to sell here after India made it mandatory for all imported solar equipment to meet stringent quality norms, following instances of poor-quality solar modules being sold.
This assumes significance, given that 80% of the solar cells and modules used here are bought from China and accounted for around $2.16 billion of imports in 2018-19. Major Chinese solar module manufacturers, such as Trina Solar Ltd, Jinko Solar, JA Solar Holdings, ET Solar, Chint Solar and GCL-Poly Energy Holdings Ltd, have been supplying to India for what will become the world’s largest clean energy programme.
Clean energy projects now account for more than a fifth of India’s installed power generation capacity. India now has 34.6GW of solar power and seeks to produce 100GW from solar projects by March 2022.
“While the Chinese manufacturers have BIS certification, for every new model to be exported here, it has to be first tested and certified by the BIS. That is getting delayed,” said the chief executive of a New Delhi-based green energy firm cited above, requesting anonymity.
“Chinese modules are not being approved. This is happening for the first time,” said a second person cited above, who also did not want to be named.
This hardening of stand comes in the backdrop of fresh tensions between India and China, even as the earlier issues that led to clashes along the Line of Actual Control (LAC) between India and China in Ladakh, which left 20 Indian soldiers dead, remains unresolved.
“Any change in materials has to be approved by BIS. Apart from the geo-political issue that may or may not be the reason behind such delays, the testing capacity is woefully inadequate. As a result latest technology is not getting used in India,” said the head of a second New Delhi-based clean energy firm, cited above who also did not want to be named.
More tariff barriers, subsidized financing for encouraging domestic equipment usage, rigorous testing of foreign equipment and prior permission requirements for imports from adversary countries, are some of the focus areas of India’s proposed power sector overhaul that have been announced as part of an economic response by India to the recent violent face-off with China.
Queries emailed to the India’s ministry of new and renewable energy (MNRE) spokesperson and BIS officials on Tuesday morning remained unanswered.
Queries emailed to Trina Solar Ltd, Jinko Solar, JA Solar Holdings, ET Solar, Chint Solar and GCL-Poly Energy Holdings Ltd also remained unanswered.
India is working on a plan to impose tariff and non-tariff barriers to put a check on imported solar equipment that will make their sourcing from China costlier. Facilitating local manufacturing in sectors, such as solar equipment, is expected to help India’s goals of playing a larger role in global supply chains, in the backdrop of the disruption caused by covid-19 that originated in Wuhan, China. It also plans to offer land near its ports to companies for building solar equipment factories.
As part of decoupling exercise with China, the safeguard duty has also now been extended to help boost India’s push for domestic manufacturing as part of Aatmanirbhar Bharat Abhiyaan, with the government plans to also shortly impose a basic customs duty (BCD) on imported solar cells, modules and inverters.
According to the latest government order, the safeguard duty is to be paid on these items at a rate of 14.9% for the first six months and at 14.5% for the remaining six months. The duty also applies to imports from Thailand and Vietnam but excludes imports from any other developing nation.
The government is also working on a plan for allowing only those manufacturers who are approved by the BIS and the MNRE for government-supported schemes, including projects from where electricity distribution companies procure electricity for supply to their consumers. A similar approved list of modules and manufacturers (ALMM) is being worked out for the conventional power space.