24 March 2016 06:50:16 IST

Ministry against dumping duty on solar cells

Argues that such levy would increase cost of solar power generation

The Ministry of New and Renewable Energy (MNRE) does not endorse the demand of the domestic solar cells and modules manufacturers for imposing anti-dumping duties on cheap imports from China and the US.

It will, however, consider what the Directorate General of Anti-Dumping (DGAD) recommends on the matter.

“We will wait for the DGAD’s recommendations. But, on the face of it, we don’t think we should impose anti-dumping duties as our domestic items are not cost-competitive,” an official from the MNRE told BusinessLine . Anti-dumping duties are penal levies imposed on items that are imported at prices lower than what the seller charges in its domestic market and also causes injury to the local manufacturers in the importing country.

Tech efficiency “Many of the existing manufacturers in India set up their manufacturing lines several years ago when costs were much higher compared to today. The technology and efficiency has improved since then. Therefore, their rates are about 20-30 per cent higher than the international competitors,” the official said. A similar attempt to get anti-dumping duties levied two years ago by domestic manufacturers such as Moser Baer Solar, Indosolar and Vikram Solar failed due to opposition from the MNRE.

Although, the DGAD had recommended steep anti-dumping duties (ranging from 50 per cent to 110 per cent) against sellers from the US, China and Taiwan, these were not notified. The MNRE had argued that the duties would increase the cost of solar power production by at least ₹1.6 crore per MW and tendered projects worth 4,000 MW would get stuck.

MNRE argument The MNRE is continuing to use the same argument today.

“I can’t say what will happen this time with the anti-dumping duty. But, if the government had levied the same last time, we would not have been able to see tariffs of ₹4.34 a unit for solar power. We do want to support the domestic manufacturers but certainly we are not in favour of the anti-dumping duty,” the official pointed out.

Indian solar cell manufacturers, in their complaint to the DGAD, have demanded action against import of solar cells from the US, China, the EU, Malaysia and Taiwan, which, they claim, have captured close to 90 per cent of their market.

The domestic industry is set for more trouble with the World Trade Organisation (WTO) ruling in favour of the US in a complaint against India’s compulsory domestic sourcing rules in the ambitious Jawaharlal Nehru National Solar Mission.