Anti dumping duty _ next burning issue in indian solar industry_ part 2

Anti dumping duty

    Definition- “Dumping is supposed to occur when the ‘export price’ of the goods is less than the ‘normal value’ of the articles sold in the domestic market of the exporter”

Indian solar (PV) manufacturer perspective

·         Indian solar PV manufacturers industry is largely smashed by cheap, large scale imported PV modules and cells from the countries like china, U.S, Malaysia and Taiwan. In phase 1 Domestic Content Ratio DCR was mandatory only on crystalline technology, so that project developers were choose thin film technology which was mostly imported from U.S at low cost with the support of us EXIM bank. though Under the draft policy for phase 2 MNRE has considering several options to implement DCR it is hard to predict what kind of decision MNRE will take (by considering project developers perspective).

·         In countries like U.S, china governments are providing lands at low cost, loan at 1-2% interest rates and subsidies financing model to the manufacturing companies due to all this they are capable to spend hefty amount on R&D and vertical integration which is reducing the cost of product. This is unfair for domestic players as they charged by 13% interest rates, low class technology, restricted capacity scaling. Many experts agree with the fact that thin film technology is not suitable for Indian environment but due to the low cost and attractive interest rates many developers were choose it.

·         From ISMA point of view anti dumping should be in charge along with strict instruction on DCR.

Project developer’s perspective

·          Solar Independent Power Producer Association (SIPPA) has come up to oppose anti dumping duty. Accordingly to them instead of applying anti dumping duty government should have to take some long term measures to protect domestic solar industry.

·         A recent research report by the Center for Energy Environment and Water (CEEW) has pointed out that very few Indian developers have adopted Crystalline Technology due to the import restrictions under the Solar Mission 2020 initiative. “Though there is numerous advanced Crystalline Silicon Technologies available the world over, the developers’ choice is restricted to domestically manufacture solar PV panels in this category.

·         Indian manufactures of crystalline silicon based modules import all major raw materials like poly silicon waters and cells and the prices of such raw materials have also crashed due to the heightened demand-supply gap. “In such a situation imposition of anti-dumping duty on solar photovoltaic modules would be counterproductive to the country’s solar aspirations.

·         Also If anti-dumping is imposed on solar imports, cost of solar power in India is bound to go up which will be borne by distribution companies and commercial consumers (as most of the DISCOMS are already poor in state).

   After assessing both the perspectives MNRE should have to take unbiased decision to protect Indian solar industry. Only imposing anti-dumping duties might work for the short-term, but it might de-incentivize innovation and investment in R&D. If India wants to improve its manufacturing, then it is imperative that a competitive advantage is maintained through investment is R&D and efficiency improvements.

    Whether to impose duty or not is not the big question, as industry is going to face little bit hard situation by either decision, the question is what measures MNRE will take to sustain domestic industry in long term basis.