Indian manufacturers have alleged that international photovoltaic module suppliers are selling below cost, or "dumping" in the Indian market. Unlike their counterparts in the U.S. and Europe, Indian manufacturers have not restricted their dumping allegations to Chinese module suppliers.
They claim that suppliers from other countries such as Taiwan, Malaysia and the U.S. have also received unfair incentives, such as subsidies, cash hand-outs, cheap debt, cheap electricity, free land, etc. and should therefore be penalized.
Chinese media recently reported that Indias Ministry of Commerce received a complaint from domestic solar module manufacturers, and that the ministry is expected to begin an anti-dumping investigation against solar panels made in China, Malaysia, Taiwan and the U.S.
This application was actually filed this January with the Directorate General of Anti-Dumping and Allied Duties (DGAD) at the Ministry of Commerce. In discussions with various industry participants, Bridge to India has learned that Indian manufacturers have asked for anti-dumping duties as high as 200%.
Given that the application was filed in January 2012, the period of investigation is likely to cover the whole of 2011. Over 300 MW worth of photovoltaic modules were imported during this time period. For these, the import prices of modules and other terms of sale would be investigated.
Based on the inputs from DGAD, the Department of Commerce will then recommend a provisional or a final anti-dumping duty. It is only after this, that the Department of Revenue, under the Ministry of Finance will act upon such a recommendation and impose a duty. It usually takes at least six months for any anti-dumping duty to be notified by the Ministry of Commerce and at least another three months for it to be implemented by the Department of Revenue under the Ministry of Finance.
While the imposition of dumping duties will depend on these lengthy and complex proceedings, the imposition of a DCR is directly under the control of the Ministry of New and Renewable Energy (MNRE).
The MNRE has already held discussions with other concerned ministries on the extension of the Domestic Content Requirement (DCR) to thin film modules. The guidelines for phase two of the NSM will bring clarity to the DCR for the next two to four years.
These guidelines were expected to be released in October 2012, but have now been postponed by a couple of months. If the DCR is extended to thin film modules, it is would have a significant impact on sales. India has become a very important market for thin film manufacturers, such as First Solar, Solar Frontier and NexPower. They might in turn react by taking up their own, or contract manufacturing in India.
Bridge to India does not believe a DCR and anti-dumping duties will help create a dynamic domestic manufacturing industry. A long term strategy for incentivizing domestically manufactured modules is needed; one that paves the way for a globally competitive Indian solar industry that can succeed without government support.
The Indian solar market is growing at an impressive pace, but domestic manufacturers are struggling to survive under conditions of oversupply. They have not been able to compete with their global competitors on prices. With dwindling company finances, there is little or no room for investments into upgrading manufacturing capabilities and improving competitiveness.
Enabling the development of a strong domestic solar manufacturing industry is one of the primary objectives of the National Solar Mission (NSM), which aims to add 20 GW by 2022 in the country. Until now, the MNRE has supported the domestic manufacturing industry by imposing a DCR on c-Si solar cells and modules for projects under the NSM.
This measure has been largely ineffective. As most modules from China are c-Si based, the DCR has limited the options for Chinese modules to projects outside of the NSM, but international thin film suppliers like First Solar (U.S.) and NexPower (Taiwan) have been the primary beneficiaries of phase one of the NSM. More than 70% of the project capacity under batch two of phase one of the NSM used thin film modules.
Read the full article in the November edition of pv magazine.
Edited by Becky Beetz.
About the author
Jasmeet Khurana is part of the Market Intelligence team at Bridge to India. He is responsible for research and analysis on projects in the Indian solar market. His expertise lies in project performance benchmarking, analysis of success factors for module sales, financing and bankability of projects in India. Jasmeet is from an engineering background and has obtained a certification in photovoltaics from the Stanford University. For further questions, hecan be reached at email@example.com or on +91 11 4608 1579.