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Bloomberg
India’s plan to cut imports of Chinese solar cells and modules by imposing a safeguard duty may have the opposite effect in the short run, according to ICBC International Research Ltd.
Stockpiles could rise rapidly as Indian developers hoard more modules before the proposal to impose a 25 percent safeguard tariff is expected to take effect in the next two to three months, ICBC’s Hong Kong-based analysts including Harry Wong said in an emailed note.
The South Asian nation will continue to rely heavily on imports from China over the next one to two years as imports will remain cheaper than domestic production even with the tariff.
India’s expansion of manufacturing capacity “has been sluggish due to higher development cost and hence it is hard for current capacity to catch up with the downstream demand†arising from the government’s target to install 100 gigawatts by 2022, Wong said.
The tariff is likely to harm domestic project developers, raising costs by at least 12 percent.