Indian Solar Imports Drop 40 Percent in Q3 but Still Up Significantly Year-over-Year
December 12, 2017
Import and export activity in the Indian solar sector dropped by $464.15 million (~₹30 billion) quarter-over-quarter to $776.08 million (~₹49.9 billion) in the third quarter of calendar year 2017. By comparison, the second quarter of calendar year 2017 registered import and export activity worth $1.24 billion (~₹79.9 billion).
The drop reflected a general slowdown in project installation activity caused by a number of market uncertainties during the period.
Solar Imports in Q3 2017 (Jul-Sep 2017):
There was a 40 percent drop in imports quarter-over-quarter, from $1.2 billion (~₹79.4 billion) in Q2 2017 to $732.87 million (~₹47.1 billion) in Q3 2017. This drop was due to several reasons including: a spike in Chinese module prices, the pending anti-dumping case, PPA renegotiations in some states, and imported solar modules that have been stranded at ports due to misclassification by port authorities.
However, compared to the same period in 2016, solar imports were still up by 44 percent.
Solar Exports in Q3 2017 (Jul-Sep 2017):
During Q3 2017, India exported solar modules and cells worth $43.21 million (~₹2.8 billion), a huge 387 percent increase from the $8.88 million (~₹572 million) reported in Q2 2017, and a 153 percent jump from the total reported during the third quarter of 2016. It is unclear if this is a one-off situation or the beginning of a trend. In dollar amount, exports are still low.
9M 2017 Activity (Jan-Sep 2017):
In the first nine months (9M) of 2017, import and export activity worth over $3.38 billion (~₹221 billion) was recorded in India. This is 61 percent more than the import and export activity worth $2.09 billion (~₹141 billion) that was recorded in the first nine months of 2016.
Compared to 9M of 2016, the Indian export market declined by 42 percent in 9M 2017 while import activity increased by 67 percent.
Solar Imports by Country:
China continued to be the largest exporter of solar modules and cells to India during the first nine months of 2017, accounting for $2.9 billion (~₹187 billion) of India’s total solar imports – making up 88 percent of all imports. This was up from the $1.7 billion (~₹110 billion) that China exported to India during the same period of 2016, when Chinese exports account for 85.2 percent of the market share of total imports.
Malaysia was the second largest exporter to India during the 9M period of 2017, accounting for $221.73 million (~₹14.3 billion) of India’s imports and a 6.7 percent market share.
Exports from China, Malaysia, and the India’s number-three supplier Taiwan, are all the subject of an ongoing anti-dumping investigation that could result in tariffs on the imported solar modules and cells. Mercom reported in September that this investigation could drag on for another year, further underscoring the uncertainty that is plaguing project developers.
If anti-dumping duties are recommended, projects that have already been auctioned and have signed PPAs would not be affected, according to a recent Mercom report. An oral hearing on the investigation is set to be held on December 12, 2017.
According to Mercom India Research, a tariff imposition in the range of $0.10 – $0.18 (~₹6.4-11.5) is being discussed in the industry.
Solar Exports to Other Countries:
Indian solar exports have jumped significantly in Q3. Turkey was the largest importer, importing solar cells and modules worth $10.69 million (~₹690 million) in the first nine months of 2017, and accounting for a 17.2 percent market share. Denmark was the second largest importer of Indian solar cells and modules, importing cells and modules worth $9.52 million (~₹615 million) and accounting for 15.3 percent of India’s total solar exports. Germany was the third largest importer with a market share of around 14 percent. The country imported Indian modules worth $8.65 million (~₹559 million) in the first 9M of 2017.
Belgium, the United States, and Senegal are other countries that account for over 7 percent of Indian solar exports each.
Indian solar installations totaled 2,247 MW in Q3 2017, up 300 MW from Q2 in which 1,947 MWs were installed according to the recently released India Solar Market Update by Mercom India Research. The report stated – overall, the conditions in the Indian solar market became much more challenging during the third quarter due to various factors, and the biggest challenge now facing the sector is rising Chinese module prices.
Another challenge facing solar project developers is the misclassification of solar modules by port authorities, which is creating confusion and project delays. Ports and port authorities across the country have begun demanding that a higher duty be paid on the imported components before they are released from the port premises. According to Mercom’s channel checks, the entire duty is 7.85 percent and the energy minister has written to the finance minister regarding this issue.
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