Fresh US Duties on Chinese Solar Import to Trigger India’s Ascent as Global Supplier
While India will be a major beneficiary in the solar equipment-making sector, India is unlikely to gain much from the other sanctioned sectors US President Joe Biden’s decision this week to increase tariffs on $18 billion worth of imports from China, which includes solar equipment among 4-5 other sectors, will trigger India’s plans to ‘Make in India‘ and become a global supplier of solar equipment, say experts.
In a fresh round of trade sanctions against China, tariffs on certain steel and aluminium products will increase from 0-7.5% to 25% in 2024, semiconductors from 25% to 50% by 2025, electric vehicles from 25% to 100% in 2024, lithium-ion non-EV batteries from 7.5% to 25% in 2026, battery parts from 7.5% to 25% in 2024 and the tariff rate on solar cells (whether or not assembled into modules) will increase from 25% to 50% in 2024, the White House announced this week.
While India will be a major beneficiary in the solar equipment-making sector, India is unlikely to gain much from the other sanctioned sectors like lithium-ion non-EV batteries or semiconductor
manufacturing are in nascent stages in India, say experts. “Recent US tariffs on Chinese imported solar panels have allowed India an opportunity to bring its thriving industrial base and robust anti- dumping measures to the forefront, enabling India to emerge as a major player in the global solar market,” says Gyanesh Chaudhary, chairman and managing director, Vikram Solar, one of India’s leading solar equipment makers and exporters. This potential shift in the market provides a strategic windfall for India, which can lead to game-changing foreign investment and technology transfers, he adds.
India’s cumulative solar module manufacturing capacity has reached 64.5 gigawatts (GW) and solar cell manufacturing capacity has reached 5.8 GW by the end of December 2023. India’s module manufacturing capacity is expected to exceed 150 GW and cell capacity to reach over 75 GW by 2026.
The US is the second largest solar market globally after China. It imports over 78% of its solar equipment requirement from China and the South East nations. The US in the last two years has taken policy initiatives to develop an end-to-end domestic solar equipment manufacturing industry, which is now not cost-competitive with the Chinese manufacturers. In June 2022, the US restricted imports from China and Taiwan with anti-dumping duties and anti-circumvention duties.
However, the US Department of Commerce allowed 24 months of duty- free access to solar cells and modules from Cambodia, Malaysia, Thailand, and Vietnam to ensure supplies and projects were not affected. That two-year window ends in June 2024. The US industry and trade were alleging China was trying to circumvent the sanctions by moving module and PV production to these countries and dumping products in the US. “There has been a longstanding love-hate relationship between China and the US leading to the imposition of tariff and non-tariff barriers by the US on Chinese products and in response, China strategically invested in Southeast Asia, thereby diversifying its supply chain,” says Ashish Agarwal, Head – Solar, BluPine Energy.
#BluPine Energy#modernbusinessnetwork #modernusinessindia#modernbusinessamerica #modernbusinesseurope#modernbusinessasia#modernbusinessgulf #modernbusinessgermany#modernbusinessworld
