Analysts slam India’s plans for anti-dumping duty revenues

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India’s Minister of State for Commerce and Industry (MoCI), Nirmala Sitharaman has proposed anti-dumping duties charged to foreign solar imports could be reimbursed to developers.

In a written reply to India’s Council of States, or second parliamentary chamber, the Rajya Sabha, Sitharaman said proposed anti-dumping duties could be remunerated to the Ministry of New and Renewable Energy (MNRE), to subsidise the extra cost to developers importing foreign solar panels. Analysts have questioned whether insulating developers from the increased cost of foreign modules is a sensible tactic. 

Bridge to India analyst, Jasmeet Khurana told PV Tech the suggested loop of anti-dumping duties “would do more harm than good”, resulting in “hardly any” funding to India’s solar industry.

On the 22 May the director general of anti-dumping and allied duties’ final findings for the MoCI, decided India’s domestic manufacturing trade association, the Solar Manufacturers Association (SMA) had “suffered injury” from dumped goods under cutting the domestic market.

The MoCI stated that “a definitive anti-dumping duty is required to offset dumping and injury” and proposed a charge of US$0.11 for US imports, US0.62 for Malaysian origin modules, US$0.59 for Taiwan origin, to US$0.81 per watt for Chinese solar imports.

“It is foolish to think that any developer will pay US$0.81 extra on import of a module from China in a hope that the government will eventually use this extra money to provide extra subsidies to solar in the country,” said Khurana.

“The government will just end up paying more for the electricity in a hope that domestic manufacturing would be supported by this measure. There is no guarantee of that happening either.”

Although a level playing field might be created in the short term “unless domestic manufacturers scale up and become globally competitive, this will just shrink the Indian solar market for no good long-term objective”, said Khurana.

Ultimately anti-dumping “will deter suppliers from all four impacted countries from doing business in India,” said Khurana, and would leave developers to source panels from unaffected countries, or domestic manufacturers.

It would also make, in terms of capacity addition and cost reduction, the government target for 20GW of installed solar capacity by 2020 “very difficult”.

Sitharaman's statement also said that funding from the National Clean Energy Fund (an environmental fine on the coal industry used to fund renewable energy projects) can also be used to subsidise developers affected if anti dumping duties are implemented.

Also talking to PV Tech Madhavan Nampoothiri, founder and director of RESolve Energy Consultants, said any anti-dumping duties paid to developers would be “neutralizing the higher cost of foreign modules”.

This would assist foreign module manufacturers and domestic developers “to a certain extent”, said Nampoothiri, but to have any affect, anti-dumping payback to developers would depend on how the refund matches up to the varying US$0.11-0.81 range of duties.

Nampoothiri also said the suggested payback subsidy mechanism would depend on how much is available from the MNRE Clean Energy Fund, estimated at US$84 million this year, to be allocated for reimbursing solar developers affected by the anti-dumping ruling – and how long the reimbursement period will last.

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