BHEL seeks levy on imported solar power equipment

State-run BHEL is pitching for duties on imported solar equipment to safeguard the domestic manufacturing industry that is being hurt by cheap imports primarily from China. BHEL's move comes close on the heels of the government slapping higher levy on imported power equipment, a development that would provide succour to domestic sector already grappling with sluggish business prospects. "The domestic (solar cell manufacturing) industry has to be given that protection otherwise cheaper imports will come and domestic industry will close down," BHEL Chairman and Managing Director BP Rao told PTI.

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The power equipment maker is making the case through its parent ministry -- Heavy Industries and Public Enterprises Ministry -- which is expected to take up the same with the Ministry of New and Renewable Energy. According to BHEL, solar equipment from some countries are coming into India at prices lower than their market value, a scenario adversely impacting domestic players. "It is against those industry level practices, the countries which are doing this is a violation of the WTO provision itself, if they are causing harm by deliberately giving prices which are lesser than the costs, it hurts any industry," Rao said.

He, further asserted that the duty would act as a kind ofsafeguard against cheap imports. At present there is no duty on imported solar power equipment. Among other diversification plans, BHEL aims to invest Rs 2,000 crore for manufacturing solar equipment such as silicon wafer, solar cell and solar module. However, sources had earlier said that the investment would be viable only if there is a minimum offtake which is guaranteed by the Indian industry and countervailing measures against dumping from China.

The domestic solar equipment industry is grappling with tough market conditions, mainly on account of cheaper imports from China that are adversely impacting local players. A raft of problems including acute fuel shortages and financial constraints are posing challenges for BHEL. The company has an existing order book of Rs 1.30 lakh crore. During the 2011-12 fiscal, BHEL raked in a net profit of Rs 7,039 crore on a turnover of Rs 49,244 crore. In the same period, the entity's net worth stood at Rs 25,373 crore.