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China-US solar issue: WTO directive could have impact in India

According to reports, was the United States wrong in imposing anti dumping duties on China-made solar modules? Yes, said the World Trade Organisation on Tuesday.

This will have an echo in India, where domestic manufacturers of solar modules have often cited the US (and the EU) precedent to strengthen their case for bringing in anti-dumping duties against Chinese products.

For those who have been saying, “See? Even the US has found China to be dumping their products; India should do the same”, the WTO panel’s findings take the stuffing out of their case a bit.

The trade body’s findings relate not only to solar modules, but to a range of products from China. However, the inclusion of solar products in the list is of interest in India.

The countervailing duties were brought in by the US Department of Commerce. China felt that the duties were inconsistent with an agreement signed under the WTO, called ‘Agreement on Subsidies and Countervailing Measures’, or SCM Agreement.

The WTO panel that examined the USDOC action at China’s behest “recommended that the United States bring its measures into conformity with its obligations under the SCM Agreement.

What the United States would now do is as yet unclear, but that is another matter. Right now, the US-based solar power producers are behaving like they have won the soccer World Cup.

Tony Clifford, CEO of an American solar power producer called Standard Solar, who has been among the most vocal opponents of duties against Chinese modules, noted after the WTO announcement that the US was already paying too high a price for solar modules due to the USDOC action.

He has graphically observed that a Chinese solar module is delivered to the west coast of Mexico at 58 cents a watt; and to the west coast of the United States at 76 cents a watt—the 18 cent difference arising out of US duties on Chinese products.

Jigar Hasmukh Shah, an Indian American who founded the solar energy company, SunEdison and who is the CEO of Coalition for Affordable Solar Energy, has also observed that the USDOC duties were “hurting American solar industry”.

In India, the Directorate General of Anti-dumping, a body of the Ministry of Commerce concluding its investigations in alleged dumping of solar modules by China and recommended anti dumping duties ranging from 11 cents (₹6) to 81 cents (₹47) — different duties against different exporters. (The duties are also on exporters from Taiwan, Malaysia and the US, but China is the leading supplier of solar modules to India.)

The Directorate’s recommendations will become formal once the Ministry of Finance ‘notifies’ them.

The WTO panels comes at a time when both sides are lobbying hectically for and against anti dumping action. Not surprisingly, those who oppose anti dumping duties are happy.

“This should be an indicator for Indian Ministry of Commerce and not to resort to an Anti Dumping Duty on Solar Modules in the name of protecting the domestic industry, which is non existent and incompetent to fulfil India’s Solar Mission,” said Anil Jain, Managing Director of Chennai-based Refex Energy, a solar power plant constructor.

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