The Indian Commerce Department is recommending that all Indians be made poorer. Not quite what we hope our own governments will do to us but common enough all the same. For they’ve decided that a 25% import duty should be imposed upon solar cells and panels. The reason being that those dastardly foreigners are willing to sell cells and panels cheaply. This would make Indians richer, they get more solar cell for their money – thus the Commerce Dept’s actions, for who would want their own citizenry to become richer?
After seven months of intense debate between solar developers opposing the step and domestic solar manufacturers insisting on it, before the Directorate General of Trade Restrictions (DGTR), the DGTR finally decided on Monday that safeguard duty on solar panels and modules imported from China and Malaysia should be imposed for two years – 25% for the first year, 20% for the first six months of the second year and 15% for the remaining six months. It upheld the domestic manufacturers’ contention that excessive imports of Chinese and Malaysian solar equipment by developers was causing them serious injury.
As we point out often enough around here a protectionist is someone who argues that you should be poorer to that they can be richer. Which is exactly what is being pointed out. The owners of those domestic manufacturing companies are arguing that every consumer in India should be poorer so as to maintain their own riches. Most public spirited of them, of course it is.
Falling prices of solar cells and modules, over 90 percent of which India imports from China, have triggered a decline in the cost of solar power generation and led Indians increasingly to adopt the technology.
India plans to make renewable power account for 40 percent of its total installed capacity by 2030, from 20 percent currently.
Cheaper modules and panels will increase that installation speed, won’t they? But, you know, we’re in a power grab here by the manufacturers:
The commerce ministry today recommended imposition of safeguard duty for two years on solar cells imports to protect domestic players from steep rise in the inbound shipments of the product.
The bit that never is explained is why the producers should be protected at the direct expense of the consumers. Well, other than the naked exercise of political power that is. Which is what is going on here. The panel and module makers are deeply interested in the tariffs, the general public not so much. As is always the case a concentrated political power beats a dispersed one. So, the manufacturers get their tariff at the expense of the consumers.
That is, protection works as protection always does. The poor consumers lose so that the capitalist manufacturers can win. Quite why this is ever considered a progressive policy choice is a bit of a mystery.