Amidst continued border issues, China has warned India against levying any anti-dumping duties on solar modules.

Chinese officials warned India against the use ‘trade remedies’ less than a week after India’s Directorate General of Anti-Dumping and Allied Duties announced that it shall undertake anti-dumping investigations into solar modules imported from three countries – China, Taiwan and Malaysia.

Officials of China’s commerce ministry said that any trade measures the levy duties on solar modules imported from China will be detrimental to India’s solar power sector as well as trade relations between the two countries.

On 21 July, India’s Directorate General of Anti-Dumping and Allied Duties responded to a petition by an association of Indian module manufacturers which sought relief from the low-cost Chinese modules that have flooded the Indian market. The sharp collapse in solar module prices imported from China has resulted in a much steeper fall in tariff bids for utility-scale solar power projects in India.

The Indian manufacturers have made several attempts to push the government for relief, either by levying anti-dumping duties or through direct financial incentives. None have worked.

In 2013, the Ministry of Commerce and Industry had proposed to levy duties ranging from $0.11 to $0.81 per watt on modules imported from the US, China, Malaysia and Chinese Taipei. However, this recommendation did not find favour with other ministries, including the Ministry of New & Renewable Energy. The proposal was thus rejected by the Ministry of Finance.

… the Ministry of Finance has refused to approve a Rs 20,000 crore ($3.1 billion) relief package for the solar cell and module manufacturers. The Ministry of New & Renewable Energy had proposed this incentives program in order to help Indian companies compete with foreign manufacturers.

Chinese officials may be correct in pointing out that any tinkering with the current situation may force project developers to starting increasing their bids in competitive auctions. Apart from Chinese imports, the latest investigation will also cover imports from Taiwan and Malaysia.

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