The Ministry of Commerce and Industry in an official statement has announced that the Directorate General of Trade Remedies (DGTR) has initiated an anti-dumping probe on imports of solar cells imported from China, Vietnam, and Thailand.

The DGTR has started the inquiry based on the petition filed by the Indian Solar Manufacturers Association (ISMA). ISMA filed the petition on behalf of Mundra Solar PV (Adani) – a unit in a Special Economic Zone; Jupiter Solar Power, a unit in the Domestic Tariff Area (DTA); and Jupiter International Limited (DTA).

The DGTR has considered the scope of domestic industry restricted to DTA units, i.e., Jupiter  International and Jupiter Solar Power. Although there are other producers in India, the DGTR has noted that the production of the two DTA units accounts for a ‘major proportion’ of the total domestic production of solar cells in India.

Thus, the DGTR has determined that the two DTA units mentioned by ISMA constitute the domestic industry and satisfy the criteria for filing an application requesting anti-dumping duty on imports of solar cells and modules from China, Vietnam, and Thailand.

ISMA alleged that dumping of imported solar cells from China, Vietnam, and Thailand is causing material injury to the domestic industry and has requested the ministry to impose anti-dumping duty on the subject goods.

ISMA has claimed no significant differences between the imported goods from the three countries and those produced by the domestic industry.

The probe will cover the period starting from July 2019 to December 2020 (18 months). The injury period under the probe will cover 2016-17, 2017-18, 2018-19, 2019-20, and the investigation period.

Injury and Causal Link

Information furnished by ISMA has been considered for assessment of an injury of the domestic industry. According to the DGTR notification, there is positive evidence of price undercutting, price suppression, and price depression effect on the domestic industry.

According to the filing, the domestic industry can sell under the Central Public Sector Undertaking (CPSU) program but not in India’s open market.. The sales volume of the companies represented by ISMA is negligible during the investigation period in the open market in which they compete with the imports. Unutilized capacity exists with the applicants, even after selling under the CPSU program. There is prima facie evidence of injury caused to the domestic industry by dumped solar cells from China, Vietnam, and Thailand, according to the filing.

Mercom spoke to some of the stakeholders in the industry who commented that the present cell manufacturing capacity in India is insufficient to fulfill the domestic content requirement (DCR) proportion under Pradhan Mantri Kisan Urja Suraksha evam Utthaan Mahabhiyan, CPSU, and other programs which adds up to more than 20+ GW. This move could destroy the market, particularly when the upstream cost is shooting up like never before.

An executive at a manufacturing company also opined that the anti-dumping investigation may have been accepted but it will not come into force as the pressure on the ministry is immense to control hike in solar components under ‘public interest’.

The previous anti-dumping case

On June 5, 2017, ISMA had filed an anti-dumping petition against solar imports from China, Taiwan, and Malaysia with the DGAD, Ministry of Trade and Commerce, requesting the levy of interim duty on solar importers. The case was later withdrawn in March 2018 saying that the petitioners intend to refile the case with an extended date of investigation for the case. The case was not refiled.

Other anti-dumping cases

India has anti-dumping duties on several other component imports including tempered solar glass, ethylene vinyl acetate  sheets used in solar modules, and aluminum and zinc coated flat products used in solar module mounting structures.

Earlier this year, the DGTR also initiated an anti-dumping probe on ‘fluoro backsheet’ imported from China. Fluoro backsheet is a polymer-based component used in the manufacture of solar modules.

Protecting the domestic manufacturers

The Ministry of New and Renewable Energy (MNRE) has also made it mandatory to enlist models and module manufacturers under the Approved List of Models and Manufacturers (ALMM) order. Only the models and manufacturers included in the list will be eligible for government or government-assisted projects, including the projects for the sale of electricity to the government under the guidelines laid down by the central government. The MNRE approved the first list under the ALMM order on March 10, 2021. This will apply to projects that have the last date of bid submission on or after April 10, 2021.

To protect the domestic manufacturers, the government had announced a 25% safeguard in July 2018. The duty was 25% for the first year, followed by a phased down approach for the second year, with the rate reduced by 5% every six months until it ended in July 2020. The duty was extended for another year with 14.90% from July 30, 2020, to January 29, 2021, and 14.50% from January 30, 2021, to July 29, 2021.

There is also a basic customs duty on the import of solar modules (40%), and solar cells (25%) starting April 1, 2022.

The domestic manufacturers were looking at a period of no duty between August 2021 to March 2022. The petition for anti-dumping duty is intended to bring in duty during this gap to protect the domestic manufacturers.