The Directorate General of Trade Remedies (DGTR), Ministry of Commerce and Industry, has imposed a countervailing duty at 9.71% of the cost, insurance, and freight (CIF) value for five years on the imports of textured and tempered (whether coated or uncoated) glass from Malaysia.

The glass is used in the production of solar panels and solar thermal applications. The textured glass under consideration has a minimum of 90.5% transmission, with a thickness not exceeding 4.2 mm (including tolerance of 0.2 mm). Further, one dimension should exceed 1,500 mm, whether coated or uncoated.

Borosil Renewables, in a BSE filing, announced that in reply to the request made by Borosil Gujarat Limited (company amalgamated with Borosil Renewables Limited), the DGTR imposed the countervailing duty. Borosil is the sole producer of solar glass in the country.

Case background

Earlier, Gujarat Borosil Limited had filed an application before the DGTR for the imposition of countervailing duty on imports of textured toughened (tempered) glass from Malaysia.

It alleged that the producers of tempered glass in Malaysia had benefitted from subsidies provided at various levels by the government of Malaysia and other public bodies. The subsidies consisted of both direct and potential transfer of funds or liabilities.

The company had furnished information on various parameters related to the adverse impact on the domestic industry caused by the alleged subsidized glass imports from Malaysia.

It was argued that programs like buyer credit guarantee and export credit refinancing offered to the exporters were subsidies since they involve a financial contribution from the governments, including public bodies, to benefit the recipient.

Subsequently, the DGTR initiated an investigation into the alleged subsidization and the ensuing material harm caused to the domestic market. The investigation will also determine the degree and effect of the subsidies to recommend the amount of countervailing duty.

Borosil Gujarat, in its submission, had said that the items produced by them and the tempered glass imported from Malaysia are alike, with no difference between the two. The two are technically and commercially substitutable and should be treated as “like articles” under the rules.

The investigation covers a 12-month period stretching from April 2018 to March 2019, and the injury investigation includes the data for the previous three years.

Domestic solar manufacturers have commented in the past that the Gujarat Borosil has essentially become a monopoly when it comes to solar glass manufacturing by filing petitions for anti-dumping investigations and blocking imports. Smaller manufacturers have claimed that it hurts their business as Borosil’s higher prices prevent them from competing with large module manufacturers.

In August this year, DGTR had published a list of parties interested in its anti-subsidy investigation concerning the import of solar glass from Malaysia. Eight parties expressed their interest in the investigation. They included Xinyi Solar (Malaysia) that submitted an exporter questionnaire response, and the Embassy of Malaysia, which offered a Government response. Waaree Energies, Isolation Energy, Patanjali Renewable Energy, and Goldi Solar Private Limited had submitted responses to importer questionnaires.

Taking into account the contentions raised, the information provided, and submissions made by the interested parties,  DGTR concluded that the product under consideration had been exported to India from Malaysia at subsidized prices, due to which the domestic industry had suffered material injury.

The authority noted that the purpose of countervailing duty is to eliminate injury caused to the domestic market because of unfair subsidization practices and re-establish open and fair competition in the Indian market.

The investigation took place between  April 2018 and March 2019.

“The imposition of the countervailing duty would in no way restrict the imports from the subject countries and would, therefore, in no way affect the availability of the products to the consumers,” DGTR said.

It noted that even if the countervailing duty imposition impacts the cost of the product, the unfair advantage gained by subsidization would be removed and a level playing field created.

The authority stated that the investigation was initiated and notified to all parties, including the Government of Malaysia, and ample opportunity was given to provide information on the aspect of subsidization.

The countervailing duty recommended by DGTR will be imposed from the date of notification issued by the central government on all imported textured and tempered glass from Malaysia.

Previously, Mercom reported that DGTR had imposed anti-dumping duty on the import of textured, tempered (coated or uncoated) glass from Malaysia for five years. It had recommended imposing an anti-dumping duty of $114.58 (~₹8,407)/metric ton for five years in the anti-dumping duty investigation of tempered solar glass.