28 November 2012 | Jasmeet Khurana
Jasmeet Khurana, Market Intelligence Consultant at BRIDGE TO INDIA, is working on project performance benchmarking, success factors for module sales, financing and bankability of projects in India.
The Indian Solar (PV) Manufacturers’ Association 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.
- The DGAD claims to have found sufficient evidence to order an investigation into the allegations
- If conclusive evidence is found, it may recommend an anti-dumping duty which is likely to come into effect only by around August 2013
- Even though any anti-dumping duties are likely to spoil an emerging market for international module suppliers, they will have a small window of opportunity right before the implementation of such duties
- BRIDGE TO INDIA expects that anti-dumping duties will be enforced selectively on both cells and modules with anti-dumping duties of 20-30%
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).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, 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.
Impact of the timing
Timing of the actual implementation is critical to assess the short-term impact of any such ruling. Projects under batch one of phase two of the NSM are expected to be covered under the Domestic Content Requirement (DCR). As there is a high likelihood of the DCR being extended to thin film modules this time, 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. The module delivery for these projects can be managed before August 2013 if the projects are executed on schedule.
Release of the bid document in Tamil Nadu is expected before the end of 2012 and as per the discussions in the consultation meeting on 23rd November 2012, the projects are expected to have a commissioning deadline before the end of 2013. This means that even these project developers can pre-order modules to avoid paying a higher price later.
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, 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%. We and even the Indian manufacturers expect that anti-dumping duties of between 20-30% can be enforced selectively on both cells and modules.