(REPOST: Quartz Media)

The Narendra Modi government is expected to impose an anti-dumping duty (ADD) on imported solar panels in order to boost sales of locally made ones. This is bound to increase the costs of setting up power plants as 89% of the solar panels used in India are imported, mostly from China, Taiwan, and Malaysia whose products are around 10% cheaper than locally made ones.

“If the anti-dumping duty is imposed—which is likely, very strongly likely—then it will make life easier for domestic producers (of solar panels),” said Amit Kumar, a partner at consulting firm PwC, who focuses on the renewables sector. An ADD of, say, 25% will allow a similar hike in prices of local products, too, bringing down the homegrown firms’ losses, Kumar added.

But that’s bad news for India’s solar power producers.

In the last few months, activity in India’s solar energy sector has stalled. The industry is struggling with rising solar panel prices and flat power demand, while, on its part, the government hasn’t held auctions for solar projects. The sector is lagging India’s target of installing 100 gigawatts (GW, or 1,000 megawatts) of plants by 2022.

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