Safeguard Duty Update on Solar from Power Minister's Press Conference

In his first formal update on the issue of Safeguard Duty (SGD) on solar imports, that expired yesterday, Power and MNRE minister R.K. Singh had a completely new take on the way forward. He was responding to a specific question asked on the issue by Saur Energy

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Asserting that the best way out was to use the conditions linked to the ALMM (approved list of module manufacturers) scheme, the Minister highlighted the fact that a closer scrutiny of solar projects across the country, including those where the government (agencies) did not have a direct role to play revealed that virtually every solar project was getting the benefit of government support directly or indirectly.

He highlighted how virtually every solar project today gets a full waiver on ISTS (Inter State Transmission charges), which is an indirect support from the government. Similarly, security deposits are waived in many other cases, including rooftop solar, which would again be read as a sort of government support.

In such a situation, the minister contended that most solar projects would eventually be covered under the rules that mandate sticking to approved manufacturers in the ALMM list. "Every manufacturer who wants to sell in India will need to make in India", he added. Thus, the minister has delivered on his promise to explore non-tariff barriers to protect domestic manufacturing.

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As this is the first time we are hearing the official view on the issue, it remains to be seen how it is received by the industry. As we have highlighted, Indian manufacturers have been urging the government to take more direct measures, including extending SGD, brining forward the application of customs duties planned from next year, and more such measures.