India’s flip flop on local sourcing of solar continues

As per reports, India might drop the pre condition of partly sourcing solar equipments under the national solar mission but only after imposing anti dumping duties on the same.

The Commerce Ministry will in all likelihood suggest imposition of high anti-dumping duties on exporters from China, Taiwan, Malaysia and the US.

What is an anti dumping duty?

Domestic governments impose such a duty when there is sufficient reason to believe that the imports reaching a country have been deliberately priced below their market value and this is affecting the local industry. This is done to protect domestic industry and save jobs which otherwise may have to shut shop because they cannot compete with the imported low priced products. Read more here.

The US meanwhile is busy setting up a dispute settlement panel at the WTO (World Trade Organisation) which will be setup by Friday.

The decision was arrived at after twin considerations, firstly it didn’t make much sense to insist with local sourcing when the US was going to challenge it and secondly, it can easily be worked around by imposition of anti-dumping duties. However, the Finance Ministry will take the final decision in the matter.

Indian manufacturers have long been hit by a flood of cheaper products from abroad. Imports will however continue because there are exemptions to the local sourcing clause.

Indian solar manufacturers have for long demanded an imposition of anti dumping duties on international imports but project developers in India tend to avoid Indian manufactures citing their low quality products.