The Directorate General of Trade Remedies (DGTR) has initiated anti-dumping investigations on imports of solar cells and modules from China, Thailand and Vietnam.
In a notification on Saturday, the DGTR said it has accepted a petition by the Indian Solar Manufacturers Association (ISMA) to probe if material injury is being caused to the domestic manufacturing industry due to dumped imports from these countries. An anti-dumping duty will be applicable if the investigation shows that the imports from the three countries are priced below the normal value in their respective countries.
ISMA had filed the petition on behalf of Mundra Solar Pvt Ltd, Jupiter Solar Power Ltd and Jupiter International Ltd. However, the DGTR on Saturday said Mundra Solar being a SEZ unit will not fall within the scope of domestic industry.
Reacting to the DGTR move, Dhruv Sharma, CEO of Jupiter Solar Power and member of ISMA’s General Committee member, told BusinessLine, “Dumping from China has been very destructive and has been eroding the cell manufacturing base in India and causing financial losses to the domestic industry.”
At an aggregate level, import prices are 35–45 per cent cheaper than domestic prices, Sharma added. “We had filed a legitimate case about four months ago. The DGTR reviewed our petition and has now come to the conclusion that we have a valid case,” he said.
Basic customs duty
Since then, the Centre has announced that it will impose a basic customs duty of 40 per cent on imported solar modules and of 25 per cent on imported cells from April 2022. Meanwhile, the diminished 14.5 per cent safeguard duty on imported modules and cells will come to an end in July.
ISMA has sought immediate interim relief from the DGTR as the industry looks at an eight-month period without either the safeguard duty or the basic customs duty. “We have shared our financial books with the authorities for their investigation. We have sought interim relief immediately from the government as the investigation gathers pace during this logistically difficult period,” Sharma said.
Along with the basic customs duty protection for the domestic industry, the Central government has also launched a ₹4,500-crore Performance Linked Incentive (PLI) scheme for domestic solar manufacturing. “However, these do not eliminate the need for an anti-dumping duty,” Sharma said.
Hitesh Doshi, Chairman and Managing Director, Waree Group said that “the investigation is a step in the right direction to creating a level playing field for domestic module manufacturers. This will provide much needed relief to the material injury caused to the domestic sector reeling under the pressure of low cost imports from these countries and will also help in protecting over three lakh jobs”.
Meanwhile, industry observers noted that if the government were to impose any provisional anti-dumping duty after the probe, then it could to some extent affect the plans of local solar developers who were looking to utilise the window of absence of any basic customs duty till April 2022 to source more solar cells from these foreign countries. There is already a 15 per cent safeguard duty (imposed in September 2018) currently imposed on imports of solar modules and solar cells from China and this duty is due to expire on July 29 this year.
Currently, India’s solar sector is reliant on imports of solar equipment. India had imported $2.16 billion worth of solar cells, panels and modules in 2018–19.