Import levy could push solar projects into litigation: MNRE

New Delhi: Raising concerns, the Ministry of New and Renewable Energy (MNRE) has said that imposing levy on imported solar cells could result in higher electricity prices as well as push many projects into litigation.

Rather than hiking the duty, the Ministry is of the view that reservation for local content could be increased in the tenders to provide relief for the domestic equipment makers.
To protect the struggling domestic industry, the Ministry of Commerce and Industry, in May, had recommended imposing a restrictive duty in the range of USD 0.11 to 0.81 per watt on solar cells imported from the US, China, Malaysia and Chinese Taipei.

"We are opposing it because this (proposed) anti-dumping duty is only on four countries. This will push up the price of power and state governments are opposing also because they want to buy cheap power," Tarun Kapoor, Joint Secretary at MNRE, told PTI.
According to him, it might happen that all the tenders which have already been awarded might go into litigation as they would not deliver in case higher anti-dumping duty comes.

"People who have bid at a competitive price for solar will get an excuse and say that now anti-dumping duty has come we cannot deliver at this price. So they will all go into arbitration.
"... almost 3,000 MW which is in the pipeline, tenders by the state, tenders by the centre, they will all go in litigation and domestic guys may still not get any orders," Kapoor noted.

The higher duty proposal also comes at a time when MNRE is working on ways to bolster renewable energy in the country, including from solar sources.
Elaborating on the issue, Kapoor said that if a developer goes into litigation that entity would not be placing orders, and as a result the domestic industry would not have any benefit.

"We are not supporting anti-dumping duty and we are supporting a domestic reservation policy we already have... That is the best method to support them because with anti- dumping (duty) people can still import from countries like Japan or Korea or some other countries.
"We feel that we can increase the quantity for the domestic content so that the domestic guy gets enough order," he said.

Many domestic solar manufacturers have been raising concerns about the dumping of cheap solar cells into India.
Going by estimates from the Indian Solar Manufacturers' Association, imports of solar products into India touched Rs 6,000 crore last year but Indian manufacturers did not even get two per cent of that business.

The recommendation of the Directorate General of Anti-dumping and Allied Duties (DGAD) for levying higher import came after a one-and-a-half year probe into allegations of cheap solar cells being dumped into India. DGAD comes under the Commerce Ministry.

A final decision on the matter would be taken by the Finance Ministry.

To protect interests of local players, DGAD proposed that Chinese imports should attract duties of USD 0.64-0.81 per watt, while the levy suggested for such cells from the US is USD 0.11 - 0.48 per watt.

Duties of USD 0.62 per watt and USD 0.59 per watt have been recommended for solar cell imports from Malaysia and Taipei, respectively.