Indian solar water heater manufacturers say they are unable to compete with cheaper Chinese imports, which have swamped the market ever since the government suspended a subsidy scheme, forcing them to turn into traders even as Prime Minister Narendra Modi exhorts global companies to 'Make in India'.

Chinese solar water heaters have been available at a heavy discount since the ministry of new and renewable energy (MNRE) suspended a subsidy scheme in October, according to traders. "Our very survival is threatened and manufacturers are turning into traders who import and sell. While the Indian product costs Rs 15,000-20,000, the Chinese unit costs only Rs 12,000. This year there is no growth for our product as 50% of the market has already been captured by the Chinese products," said Chandrashekhar, general manager of Karnataka-based company Eagle Solar, which manufactures 7,000 units of solar water heaters per year.

Domestic manufacturers in the Rs 1,000-crore industry say that soon after the subsidy was suspended China increased export duty by 17% on glass vacuum tubes, a component that is used to manufacture solar water heaters for residential use and is not available in India. This will increase the price of the Indian solar water heaters further, they say

"Manufacturers have invested a lot in expansion and now we can't compete with the cheaper Chinese units. The existing manufacturers are in trouble, forget about new entrants. There is no 'Make in India' here," said M Ganesh Pai, director of Supreme Solar, which manufactured 40,000 units of solar water heaters in 2013-14. According to an MNRE official, the ministry is aware of the situation. "China has increased duty on tubes and removed all taxes on finished product, making them cheaper. We sent a reminder to the revenue department some time ago asking them not to make the finished product duty free," said the official, who did not wish to be identified.

Under the National Solar Mission scheme, many companies started manufacturing solar water heaters in India and invested huge funds to enrol themselves as channel partners with the clean energy ministry availing the subsidy. These 72 manufacturers put together produced about five lakh units, in addition to production in the unorganised sector. The subsidy made solar water heaters cheaper by 60% in special states such as Uttarakhand, Jammu & Kashmir, Himachal Pradesh and the Northeast, and by 30% in others.

Source:- economictimes.indiatimes.com