The Indian Solar Manufacturers Association (ISMA) has filed a petition with the Directorate General of Safeguards that seeks to impose a Safeguard Duty on imported solar cells from China, Malaysia, Singapore and Taiwan.
ISMA has already filed an anti-dumping petition in June with the Ministry of Trade and Commerce, against Chinese solar modules and cells. In a hearing last week, the Indian module manufacturers and module exporters to India presented their views on the anti-dumping investigation and its validity last week.
There has been some pushback against antidumping duty imposition on solar cells. Most module manufacturers have argued that there is not enough cell manufacturing capacity in India and the higher cost of Indian made cells. Manufacturers have now decided to file their own petition seeking Safeguard Duty to ensure they get relief in one or the other case. This petition ratchets up the uncertainty level as the industry must deal with another trade case with unknown implications. However, government has assured that all projects that have been auctioned recently and for which PPAs have been or will be signed before the imposition of the anti-dumping duty will be exempted from the effects of the anti-dumping duty.
The Safeguard Duty petition cites a need to protect the interests of domestic manufacturers from the serious threats caused by increased imports.
ISMA submitted the petition on behalf of domestic manufacturers Mundra Solar PV Limited, Indosolar Limited, Jupiter Solar Power Limited, Websol Energy Systems Limited, and Helios Photovoltaic Limited. These five companies claim that they collectively manufacture more than 50% of solar cells produced in India.
The applicants are requesting the immediate imposition of safeguard measures for four years, and the imposition of a provisional Safeguard Duty in view of the steep deterioration in the market share and performance of the domestic industry.
The Directorate General of Safeguards accepted the petition and has asked all stakeholders to provide their views on it by January 18, 2018.
The applicants have submitted the relevant import and production data for financial year (FY) 2014-15 to FY 2017-18 (up to September 2017).
Taking the base year as FY 2014-15, applicants claim imports have increased appreciably. The applicants claim that increased imports threaten to inflict serious injury on the domestic industry, which manufactures products that are similar to and direct competitors with the products under consideration.
Applicants also claim that despite rapidly expanding demand in India, the sales and market share of the domestic solar manufacturing industry has remained stagnant in recent years and even decreased sharply from the base year of FY 2014-15. The domestic industry had a market share of 13 percent in FY 2014-15, which declined to 7 percent during FY 2017-18. During the same period, it is important to note that the market share of imports increased from 86 percent to 90 percent.
It is unclear how domestic manufacturers were able to increase their manufacturing capacity by 373% during the same period while their market share was declining every year.
Click here for a copy of the petition.