India's Solar Power Dreams on Hold

India's plans for a major ramp-up in solar power are on hold after a proposal to impose anti-dumping duties on equipment from overseas has led developers to say proposed projects would become unprofitable.

Industry officials say imports of solar equipment worth millions of dollars that were in the pipeline from U.S., China, Taiwan and Malaysia are now unlikely to come to India anytime soon.

India had been planning to raise solar power generating capacity nearly tenfold by 2022 to help wean itself off heavy imports of oil and gas that contribute to a chronic trade deficit. The sector has been booming in recent months too, as the cost of imported solar equipment has dropped sharply.

But the commerce ministry is now proposing duties on goods from overseas to protect local manufacturers from being overwhelmed by the cheaper imports. The finance ministry will take a final decision on the proposal by Aug. 22.

Any tariff proposal is set to fuel tensions between India and U.S., with trade relations already at a flash-point as the World Trade Organization deliberates a India-U.S. dispute over a rule that mandates local sourcing for some government-backed solar projects.

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