It is a well-known fact that China’s solar sector is highly subsidized. This was the official reason for US President Donald Trump’s announcement of a 30% tariff on imported solar equipment in January as Chinese solar companies undercut US solar manufacturers. The Narendra Modi government is walking down the same path; it has imposed a safeguard duty (SGD) on solar cells and modules from China and Malaysia, effective 30 July. About 85% of India’s solar cells come from both countries. The argument for such a trade intervention is the rising “dependency” on China on one hand and economic and employment loss on the other.
From an environmental, economic as well as (energy) security standpoint, such tariffs are unfortunately counterproductive. China has acquired tremendous experience in the production process, which gives its companies a worldwide lead in production efficiency. As a result, China can offer low prices due to economies of scale. And abundant supply means prices may drop by about 35% in 2018 and another 10-15% in 2019. Read More
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