Lok Sabha Question No. 683 (UNSTARRED), answered on 2018-12-13
Subject: China-made Solar Cells
Ministry: NEW AND RENEWABLE ENERGY
Asked by: ASADUDDIN OWAISI

## GOVERNMENT OF INDIA MINISTRY OF NEW AND RENEWABLE ENERGY

## LOK SABHA UNSTARRED QUESTION NO-683

TO BE ANSWERED ON-13.12.2018

## CHINA-MADE SOLAR CELLS

## 683. SHRI ASADUDDIN OWAISI

Will the Minister of NEW AND RENEWABLE ENERGY be pleased to state:-

- (a) whether China-made solar cells and channels are much cheaper than Indian ones, if so, the details thereof and reasons therefor;
- (b)  whether  Indian  industry  favour  Chinese  solar  goods  than  Indian  on  the  plea  of  being cheaper and high quality, if so, the details thereof;
- (c)  whether  Indian  solar  panel  and  cells  manufacturing  industry  is  dying  a  slow  death  and many have closed down their production, if so, the details thereof;
- (d) whether the Industry has asked the Government to put an anti-dumping duty on cells and panels imported from China, US, Taiwan and other countries, if so, the details thereof; and (e)  the  steps  taken  or  being  taken  by  the  Government  to  save  the  domestic  solar  cells  and channels manufacturers?

## ANSWER

## THE MINISTER OF STATE FOR NEW & RENEWABLE ENERGY AND POWER (I/C) (SHRI R.K. SINGH)

(a) As per feedback received from Central Public Sector Undertakings (CPSUs) like Bharat Heavy Electricals Limited (BHEL), Bharat Electronics Limited (BEL), Rajasthan Electronics & Instruments Limited (REIL), etc. which are involved in manufacturing of solar PV cells and/or panels, and international prices of solar panels as available on  internet, the price of domestically manufactured solar PV panel with domestically manufactured solar PV cell is higher than the price of imported solar PV panel.

Some of the major reasons for China-made solar cells and panels being cheaper than Indian ones, are as follows:

- (i)  The  country  does  not  have  a  manufacturing  base  for  the  upstream  stages  of  solar  PV manufacturing chain, i.e., Polysilicon, Ingots/Wafers, etc.
- (ii)  Since  the  assured  market  available  to  domestic  manufacturers  is  limited  on  account  of World Trade Organization (WTO) restrictions restraining preferential treatment exclusively for domestic industry, they are not able to set up larger plants, thereby loosing on economies of scales.

(iii)  As per industry's views, some of the reasons for poor manufacturing capacity are high cost of land/ electricity, low capacity utilization, high cost of financing.

- (b)  & (c) As per the final findings dated 16th July, 2018, by Directorate General of Trade Remedies (DGTR) in the investigations concerning imposition of Safeguard duty on import of  solar  cells  and  panels,  DGTR  has  concluded  that:  'The  domestic  industry  has  suffered serious injury, considering overall performance, on the basis of listed economic parameters such as market share and profitability,  which have sharply declined  over the injury period 2014-2015  to  2017-2018  (Annualised)  whereas  market  share  of  imports  have  increased during  the  same  period.  This  has  caused  significant  overall  impairment  to  the  domestic industry.'
- (d) Directorate General of Trade Remedies (DGTR)  had  initiated an anti-dumping investigation on Solar Cells whether or not assembled partially of fully in modules or panels or on glass or some other suitable substrates from China PR, Malaysia and Chinese Taipei on 21.07.2017. However, on the request of Indian Solar Manufacturers Association, representing the applicant domestic industry, the case was terminated on 23.03.2018.
- (e) The solar power projects being implemented by the Central Public Sector Undertakings (CPSUs) with financial support from Government and those rooftop solar projects which are implemented with  central  financial  assistance  are  mandated  to  source  their  requirement  of solar  cells  &  panels  from  domestic  sources  as  per  extant  Guidelines,  in  a  World  Trade Organization (WTO) compliant manner.

Further,  based  on  the  final  findings  of  DGTR,  the  Government,  through  notification  no. 01/2018-Customs (SG) dated 30th  July,  2018,  have  imposed  Safeguard  duty  on  import  of solar cells whether or not assembled in modules or panels, as follows:

- i. twenty five percent. ad valorem minus anti-dumping duty payable, if any, when imported during the period from 30th July, 2018 to 29th July, 2019 (both days inclusive);
- ii.  twenty  percent.  ad  valorem  minus  anti-dumping  duty  payable,  if  any,  when  imported during the period from 30th July, 2019 to 29th January, 2020 (both days inclusive);
- iii.  fifteen  percent.  ad  valorem  minus  anti-dumping  duty  payable,  if  any,  when  imported during the period from 30th January, 2020 to 29th July, 2020 (both days inclusive);

Nothing contained in the notification dated 30th July, 2018, mentioned above shall apply to imports of subject goods from countries notified as developing countries vide notification no. 19/2016-Customs (N.T.) dated 5th February, 2016, except China PR, and Malaysia.

Further, domestic manufacturing of solar cells and panels in India is being supported by the Government  of  India  through  Modified  Special  Incentive  Package  Scheme  (M-SIPS)  of Ministry of Electronics & Information Technology. The scheme, inter alia, provides for:

- i. 20-25% subsidy for investments in capital expenditure for setting up of the manufacturing facility.
- ii. Reimbursement of countervailing Duty (CVD)/ Excise Duty for capital equipment for the units outside Special Economic Zone (SEZ).

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