No Safeguard Duty on Solar Imports for Now, Says Ministry of Finance

A parliamentary standing committee report has alleged that thousands of jobs may have been lost due to dumping of solar panels.

The report does not cite a credible source or survey but goes on to say “One estimate suggests that due to the dumping of Chinese solar panel there is a loss of nearly two lakh jobs as nearly half of our domestic industry capacity remains idle.  This is something that the Committee finds shocking.  It strongly recommends the Department to address the problem of poor implementation of DGAD findings on dumping and subsidy of Chinese goods.”

The report is quite scathing in its language and mentions the state of anti-dumping investigations against Chinese goods is a much more deeply rooted problem than unfair trade practices Many small and mediums size enterprises (SME) can’t event afford to initiate and anti-dumping claim or other trade defence measure because of the high costs in applying to the Directorate of Anti-Dumping & Allied Duties (DGAD).

Making job loss allegations without thorough research and findings takes away the credibility of such reports.



The report also wanted that the anti-dumping framework suffers from poor implementation. “Some elements are able to import the Chinese goods by circumventing the goods put under anti-dumping framework through misclassification of products,” noted the report. The report, however, appreciates that the period to complete investigations has been shortened from 365 days to 270 days.

Currently, there is no method available to review the the effectiveness of anti-dumping measures taken by DGAD.

The report made the following recommendation: “solar power industry must explore the avenues of protection under countervailing duties (CVD) since the Chinese solar industry enjoys WTO non-complaint subsidies of the Chinese government.”

The committee also found that India has been more than favourable when giving market access to Chinese goods in the name of ‘ease of doing business’, which, it noted, is destroying domestic businesses. At the same time the report says China is smartly protecting its industry from Indian competition. For example, Indian products suffer delays and high fees to get certified or registered with Chinese authorities before exporting into China, whereas Chinese products are certified or registered quite easily and faster by the Bureau of Indian Standards (BIS). The report recommends BIS to reciprocate in the same manner as the Chinese.

Recently, taking a protectionist stance, the Directorate General of Trade Remedies (DGTR) recommended a 25 percent safeguard duty on solar cell imports from China and Malaysia for the first year, followed by a phased down approach for a second year. India’s solar and wind sectors are facing several trade disputes. These cases have been adding to the uncertainties in the Indian renewable energy sector, especially solar. Until these disputes are resolved, it is hard to see how India can attain 175 GW of renewables (out of which 100 GW will be solar) by 2022.