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BW Businessworld

'Imposition Of Anti-dumping Duty Is Needed'

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Pradeep Kheruka, Vice Chairman at Borosil Glass Works Ltd and Member of Indian Solar Manufacturers’ Association (ISMA) says that at present the Indian domestic players make up only 18 per cent of the market as it is dominated by international cell manufacturers like First Solar. The recent debate on need to impose anti-dumping duty being pushed by the domestic players has not been received well by international players. Especially considering the ongoing WTO complaint against India by USA, which claims we are violating international trade practices (An Uneven Battle) . Kheruka says that given the plans like the 700 MW of solar power expected to be installed in India over the next 12 months, 2.3GW of solar installations are expected in the commercial parity space in the next 4 years and cumulative installed capacity by 2016 forecast at 12.8 GW – this could give the much needed push to the domestic solar cell manufacturers. He explains the problems and suggestions to spur growth in the sector

What are the main hurdles/ problem in the sector?
Indian solar equipment manufacturers make world class products at internationally competitive prices. A four-fold rise in exports to markets like Germany and Japan bear this out.

The principal hurdle is the incessant and illegal dumping of solar cells and modules at prices which are below the cost of production from certain countries. Ministry of Commerce has recently recommended imposition of anti-dumping duty based on a two year long quasi-judicial investigation into the matter, in the course of which 18,000 pages of written submissions were examined, a public hearing was held and foreign suppliers visited and their books examined by officers of the Ministry of Commerce.

Once Ministry of Finance notifies duties as recommended by Ministry of Commerce, the market conditions are expected to stabilise, and Indian solar installations will continue unabated. The price difference in the final total cost of power to the consumer is expected to be 2 to 3 paise per KwH.

Can these be addressed by the upcoming budget? How?
The budget can come up with incentives relating to feed-in tariffs for roof top solar installations in households, in the style of the German solar policy. This will encourage lakhs of Indian private persons to invest in solar installations. They will be paid only for actual power generated by them and fed to the grid.

What would be the recommendations for the government in this sector?
That the government institute a well-considered policy drawing in public investment and participation in solar power generation, by various policies including roof top solar in homes and industry.

What are the tough steps (things that are absolutely needed but could be difficult due to vote bank politics or different stake holders' involvement etc) the government needs to take for growth in this sector?
Tough steps are the imposition of anti-dumping duty as recommended. This will lead to a short term rise in the overall cost of power, say 2 to 3 paise per KwH. However, in the long term, this will lead to manufacture of polysilicon and wafers in India. This will use Silica, which is the most abundant raw material in India, and allow the means to generate solar power with no outflow of foreign exchange. This is absolutely essential if the country is to set a target of generating 100,000 MW of solar power.