When Will the Indian Solar Industry stand on its feet and stop asking for government protection?

The solar industry which enjoys government patronage in India wants more protection and has demanded anti-dumping duties as high as 30 to 35% on import of solar cells. The industry claimed that it has suffered losses of Rs 1,000 crore due to dumping of cheaper products into the Indian market.

“The thin-film and silicon photo voltaic cells and modules imported into India from the USA and other Asian countries are being sold at ridiculously low prices bleeding the local industry and violating international fair trade regulations,” said H R Gupta, managing director, Indosolar Ltd.

The domestic solar manufacturing industry has also filed a case of dumping against the US, China, Malaysia and Taiwan in November 2012 with the directorate general of anti dumping (DGAD) on which the DGAD is yet to decide.

Solar in India has been growing thanks to government subsidies and the renewed interest in the sector. But very often companies enter such new arenas simply to enjoy government benefits and exit as soon as the incentives dry up. A classic case is that of the wind sector where major players had established wind turbines only to run off as soon as the twin incentive schemes were scrapped. Any government support cannot be life-long and is simply aimed at providing a leverage till the industry can survive on its own. Such schemes therefore need to have a mechanism to weed out unserious applicants who are simply in it for short term gains.

Indian solar industries tend to favour imports as they are cheaper than the domestic counterparts.

The National Solar Mission (JNNSM) had mandated 30% of local equipment sourcing in its first phase of project bidding and also for the second phase that US has challenged in the WTO. But the US is also a bit of a hypocrite since it itself imposed anti-dumping duty as high as 250% for some Chinese companies and yet it wants India to not do the same for US firms.

The dumping of PV products by China, Taiwan, Malyasia and the US causes huge losses to the Indian industry. But the Indian industry needs to learn fast to stay competitive in global markets and not seek the support of anti-dumping rules. India has also exported PV products from which it earns money.

A better way for it would be to encourage the solar manufacturers from other countries to set up their own domestic hubs in the country by establishing dedicated parks and providing them with adequate facilities. That would create an adequate level playing field for all.