Anti dumping duty _ next burning issue in indian solar industry

   “We will pool our scientific, technical and managerial talents, with sufficient financial resources, to develop solar energy as a source of abundant energy to power our economy and to transform the lives of our people. Our Success in this endeavor will change the face of India. It would also enable India to help change the destinies of people around the world.”

          Those are the words of Hon. Prime minister of India Dr. Manmohan Singh at the time of addressing National Action Plan on Climate Change (NAPCC). Clear, determinant and encouraging speech by prime minister turns into the action by announcing Jawaharlal Nehru National Solar Mission (JNNSM). A mission to transform energy dependency on fossil fuel to the renewable source of power mainly solar energy by creating the policy conditions for its diffusion across the country as quickly as possible. Ministry of New and Renewable Energy (MNRE) started planning to establish strong policy framework for this mission. Before announcement of this mission India had installed capacity of mealy 17.8 mw. It means MNRE has to establish entirely new industry. Even though it was a hard task to develop optional power source which is relatively costlier than conventional sources under the variating global economic conditions. MNRE successfully manage it by implicating various plans. And at the end of October 2012 mission crossed milestone of installed capacity of 1000mw. Since announcement of the JNNSM, Indian solar industry has been facing many hurdles related to the global over capacity, financial backups, loose RPO enforcement conditions and recently born TRADE war.

    The Indian Solar (PV) Manufacturers’ Association on behalf of three Indian cell manufacturers, namely, Indosolar, Websol Energy Systems and Jupiter Solar has filed a dumping complaint against cell and module imports from China, the US, Malaysia and Taiwan. This complaint was first reported on January 2012 to the Directorate General of Anti-Dumping and Allied Duties (DGAD) at the Ministry of Commerce. On November 23rd 2012, DGAD announced that it had found sufficient preliminary evidence of dumping in India. And investigation has started from that day. The ‘period of investigation’ has been determined as between January 1st2011 to June 30th2012 (18 months) as part of the investigation, any entity that is directly impacted in any manner by the duties is referred to as an ‘interested party’. Ac-accordingly, an ‘interested party’ can be any of the following: domestic industry on whose complaint the proceedings are initiated, exporters or the foreign producers of the like articles subject to investigation, importers of the same article allegedly dumped into India, government of the exporting countries, trade or business associations of the domestic producers or importers of the dumped product.

Factors, which are reducing the cost of Chinese product

·         Strong governmental support

At the beginning of 2008 Chinese government sense the future aspects of the solar PV industry worldwide, which was the triggering point for them and accordingly they began their massive capacity formula. Govt had given free land to the pv manufacturers, quick clearance for the projects, large benefits in terms of 1% -2% interest rates on loan, tax benefits on large exports, etc. due to all these reasons Chinese companies were thrive to expand their scale and vertical integration model.

·         Scale and vertical integration

China has some of words largest PV manufacturing companies which cover almost half production market worldwide. Suntech has annual production capacity of 2000 MW, while as the total module production capacity in India is about 1.5 GW and cell capacity is about 500 MW. Chinese manufacturer are surviving in this surplus supply circumstance, is because of their vertical integrating chain of supply, so as per market condition they have a scope to shift their margin along the chain. It is maintaining their flexibility in this harsh condition.

·         excessive export volume

Some experts doubting about their export volume. According to them, Chinese firms are selling PV modules below even the cash cost of production. Chinese manufacturers want to show high export numbers so that state-owned banks do not call in their loans and in the hope that they will eventually be given a debt waiver.

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