The Directorate General of Safeguards Duty (DGS), in its preliminary report investigating the dumping of solar cells, (whether or not assembled in modules or panels), has suggested a 70 per cent safeguards duty on imports from China. The DGS has identified ‘serious injury’ to the domestic industry caused due to increasing imports and declining prices of Chinese solar panels.“I recommend that pending a final determination, considering the average cost of sales by the Domestic Industry arrived at on the basis of import quantity ratio of solar cells and solar modules (confidential), a reasonable return on the cost of sales excluding interest, the present level of import duties, and the present average import prices, a provisional Safeguard Duty be imposed at the rate of 70 per cent (Seventy percent) ad valorem on the imports of the PUC (solar cells),” said the preliminary report of the DGS.The DGS has not suggested any duty on the imports from the US and the European Union, citing very low imports. The suggested duty is based on the submission made by the domestic industry and would be subject to further investigation and approval from Finance Ministry, thereafter.The investigation is a response to the application by Indian Solar Manufacturers’ Association (ISMA) which has pleaded the imports led to considerable damage to the indigenous sector; a retrospective duty should be imposed on the importers. It said that around 80 per cent of the market has been taken away by the imports.“The annual import volumes of the solar cells have increased from 1,275 Mw in 2014-15 to 9,474 Mw in 2017-18.
This is an increase of 643 per cent in 2017-18 (Annualised) from the base year 2014-15. Moreover, there has been a sudden surge in imports volumes during the first six months of 2017-18, which is 74 per cent of the imports in 2016-17, said the report.The DGS has also observed that while China’s import growth slowed down in other countries, it increased considerably towards India. The reasons cited are duties imposed by both EU and the US on Chinese solar imports and sudden surge in India’s demand due to the revision of solar capacity addition of 100 GW by 2022.“China’s export orientation in respect of the solar panels is unquestionable, but a material fact that emerges is that during the past two years, both its direction and volume of export trade changed in a significant manner towards India. While China’s exports to India constituted a paltry 1.52 per cent of its total global exports during 2012, solar imports increased to 21.58 per cent during 2016.During H12017, the share of Chinese solar exports to India stood at 38.7 per cent and compared to the 5 per cent of the US and EU combined.“When faced with hindrances in exports to the EU and USA, China’s huge production and excess capacities of the PUC which even otherwise is export-oriented, had to find an alternative outlet, which they found in India,” said the DGS.It also acknowledged that despite the rapid expansion in domestic demand due to new aggressive targets, the market share of the DI has decreased; the DI had a market share of 13 per cent in 2014-15, which declined to 7 per cent during 2017-17. During the same period, the market share of imports increased from 86 per cent to 90 per cent, said DGS.This is the second attempt by the Indian panel makers to approach the DGAD for anti-dumping duty. The first case of dumping was filed in 2012 against the US, European Union, China, Malaysia and Taiwan. While DGAD finalised duties to tune of $0.48 per unit to $0.81 per unit on the solar cells & modules imported from the above-mentioned countries, the ministry of finance did not impose the same and let the duty lapse in May last year.