In a recent meeting with a delegation from the Indian Solar Association (ISA) and the Finance Minister of India, the ISA voiced its concerns over an anti-dumping duty and the change in law provisions in PPAs.  The ISA delegation, which included the ISA president and a number of domestic solar developers, went on to make recommendations to the government, which they believe would help the country meet its solar target of 100 GW of solar by 2022.

Expressing concerns regarding the imposition of an anti-dumping duty, it said that such additional costs will have an adverse impact on domestic project developers who have entered into power purchase agreements (PPAs) prior to any imposition of duty and are yet to procure the modules. The ISA also cautioned the government against the uncertainty in the mechanism of the change in law provisions in PPAs.

“The government must consider providing price incentives, subsidized credit and other financial benefits before levying an anti-dumping duty,” the ISA recommended.

The Indian Solar Association also provided certain recommendations to the Finance Ministry ahead of the next budget.

Key Recommendations:

• Existing PPAs must be exempt from the burden of an anti-dumping duty.
• Anti-dumping duty should be levied after a gap of nine to 12 months from the date of issue of notification regarding levy of anti-dumping duty.
• Generation of solar energy is exempt from tax but the components that form a part of the generating source are not. The government should impose 0 percent duty on solar modules, equipment, materials, services.
• The classification of solar modules must be made under category 85.41 of customs duty, once and for all.
• Funding must be provided to solar project developers and equipment manufacturers at a rate below 7 percent. This can be done either through IREDA or by setting up an exclusive bank to lend to renewable energy projects.
• An insurance guarantee must be provided under a national insurance program for solar project developers to increase the bankability of projects.

Not surprisingly, the anti-dumping investigation has generated conflicting interests among stakeholders in the Indian sector. On one hand, the Indian Solar Manufacturers Association (ISMA) wants an anti-dumping duty on solar imports from China, Taiwan, and Malaysia. It also petitioned the Directorate General of Safeguards to impose a Safeguard Duty on imported solar cells from those countries.

On the other hand, the Indian Solar Association (ISA), which represents solar project developers, as well as the engineering procurement and construction (EPC) contractors in India, are against the imposition of an anti-dumping duty.