Recent reports (refer) suggest that in view of the large number of solar PV projects under development in India, the Ministry of New and Renewable Energy (MNRE) has asked the Ministry of Commerce to ”stay” any possible imposition of anti-dumping duties on solar PV modules in India. In May, the investigations complete two years from the submission of the complaint and any announcement beyond this timeframe is redundant. The Directorate General of anti-dumping duties (DGAD) under the Ministry of Commerce will meet next month to make its stand clear.
- The “stay” is meant to protect the Indian solar manufacturing sector
- Such a measure however, may lead to indecision and scuttle new investment propositions, harming the market
- BRIDGE TO INDIA is against the implementation of anti-dumping duties
This initiative is designed to protect the Indian solar manufacturing sector. However, the word “stay” in MNRE’s request on anti-dumping investigations represents an underlying and fundamental flaw in India’s policy approach. Such measures lead to indecision and scuttle new investment propositions, harming the market. (Moreover, anti-dumping investigations are a quasi-judicial process and the MNRE’s advice should only be taken as an input. The case should be judged on merit of whether or not dumping has taken place.) The same is happening with the capital subsidy process for distributed solar plants under the MNRE. Even though the ministry does not have funds, it continues to say, for more than a year now, that the mechanism is still in place. While one could argue that the subsidy mechanism itself harms the market segment, a non-functioning one is even worse. Many industry stakeholders have therefore requested the ministry to just do away with subsidies altogether. A third example of “stay” and confusion is manufacturing. Investments into manufacturing in solar in India are bound to come to a halt as well, if the MNRE is unable to provide a clear and reliable policy position. The ministry can’t keep the market guessing.
In principle, BRIDGE TO INDIA is against the implementation of anti-dumping duties as we believe that it would have a negative impact on the solar industry in India. However, it is more important that the government bring transparency to its processes. In an infrastructure industry, such as electrification, with investment horizons of 10 years or more, transparency is key. The government could help design an enabling framework or it could step aside and let the market work.