Anti dumping investigation on solar industry initiated in India

The Indian Solar (PV) Manufacturers’ Association in India had filed a dumping complaint against module imports from China, US, Malaysia and Taiwan in January 2012 with the Directorate General of Anti-Dumping and Allied Duties (DGAD) at the Ministry of Commerce. Indian manufacturers 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 just Chinese module suppliers. According to recent announcements, the DGAD claims to have found sufficient prima facie evidence and is now ready to begin a focused investigation. The ‘period of investigation’ has been determined as between January 1st, 2011 to June 30th, 2012 (18 months). According to BRIDGE TO INDIA, this means that over 600MW of module imports, mostly in Gujarat and batch one of phase one of the National Solar Mission (NSM) will be investigated for the import prices and other terms of sale.

If conclusive evidence is found in the investigation, based on the inputs from the 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. The actual imposition of anti-dumping duties will depend on lengthy and complex proceedings where Indian and international module suppliers will be given due time to put across their respective cases. Based on previous anti-dumping duty investigations in India, BRIDGE TO INDIA believes that it usually takes at least five-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. Hence, according to BRIDGE TO INDIA, anti-dumping duties are not likely to be implemented before August 2013.

“Timing of the actual implementation is critical to assess the short-term impact of any such ruling”, says Market Intelligence consultant Mr. Jasmeet Khurana, who works on project performance benchmarking, success factors for module sales, financing and bankability of projects in India. According to Mr. Khurana, projects under batch one of phase two of the NSM are expected to be covered under the Domestic Content Requirement (DCR). Further, since BRIDGE TO INDIA believes that there is a high likelihood of the DCR being extended to thin film modules in phase 2 of the NSM, any anti-dumping duty will not have a significant impact on NSM projects. More clarity on the DCR is likely to be available within a few weeks as the MNRE expects to bring in the draft guidelines for phase two of the NSM (2013-2017).

“Assuming that our estimate of the actual implementation date for anti-dumping duties is correct, projects allocated under the Rajasthan Solar Policy can attempt for early delivery and procure lower cost modules” adds Mr. Khurana. According to him, the module delivery for these projects can be managed before August 2013 if the projects are executed on schedule.

Given the timing, BRIDGE TO INDIA expects a large number of orders to be placed and delivered just before the anti-dumping duties are implemented. “International suppliers will have a small window of opportunity to sell their lower priced modules right before the implementation of such duties.”

BRIDGE TO INDIA does not expect equal anti-dumping duties to be enforced on all the countries and module suppliers under investigation. In fact, according to BRIDGE TO INDIA, it will be difficult for India to enforce anti-dumping duties on module suppliers from the US. Indian manufacturers have petitioned for anti-dumping duties within a wide range of 20-200%. It is expected that anti-dumping duties of between 20-30% could be enforced selectively on both cells and modules.