India to impose Anti-dumping duties soon

The Chinese and other Asian players like Malaysia and Taiwan have continued to supply their solar cells and modules all over the globe at really cheap rates. In fact the top cheap solar panels supplied globally are almost all Chinese. This has resulted in the local industry dampening in major countries. After the recent EU-China solar spat, it is now India who has decided to impose anti-dumping duties against US, China, Taiwan and Malaysia. The Ministry of Commerce has finally woken up to to the pleas of the domestic Indian Solar companies. As a result of massive oversupply, major Indian companies like Lanco Solar, Moser Baer, Indosolar etc have suffered losses and even shut down.

After the National Solar Mission proposed to limit the usage of international solar equipments in India, US filed a WTO Protectionist case against India, to protect its domestic players. First Solar has a majority share in the Indian solar market. The reason for First Solar’s spectacular success in India is due to India’s solar subsidy policy JNNSM. The policy which was meant to support India’s domestic solar panel companies though a “domestic content” provision has ironically helped First Solar become the undisputed leader in winning most of the JNNSM projects.

China has gobbled up the entire global solar industry. Europe has recently imposed an 11.8% duty on China, which can increase further depending upon negotiations. China has thus limited its solar panels export to Europe. The limit has been set at 10 GW per year in order to avoid anti-dumping duties. It seems like the whole world is against China now. The Indian Government thus needs to sit up and take affirmative steps to curb the foreign onslaught on the domestic industry. China also has plans to set up manufacturing facilities in India, in order to circumvent duties.

Why were US and China successful in capturing the Indian Solar Market

The Chinese are very well aware of promoting green energy, since they wanted to reduce their dependency on the dirty coal. As a result of which the Chinese Government promoted the solar energy usage. The Chinese banks started giving funds to the domestic companies to protect them from insolvency. Thus the Chinese Government and banks have played a major role in setting up the Chinese footprint in the solar industry globally.

In case of USA too, the US Export-Import bankhas supported the US players by being the largest financier to them. Almost $350 million were granted for solar projects by the US Exim Bank in three years time. On top of this, USA’s First Solar hit the Jackpot in India through a loophole in the solar subsidy program. The JNNSM policy excluded thin film solar panels from the domestic content provision which meant that solar developers could buy thin film technology from foreign companies. The cost structure and scale of Indian solar manufacturers was no match to that of the global solar companies. First Solar took advantage of this provision and thus benefited hugely. The company also won a 50 MW solar panel supply contract to Kiran and Mahindra Solar companies which won the bid under JNNSM.

India is an emerging economy and a developing solar power in the world. China has other trade relations with India too. Imposing solar panel duties on Chinese imports might hamper those relations too. India thus needs to act right and handle the situation tactfully. The local industry should also be encouraged by giving subsidies and other benefits to the domestic manufacturers.