India Recommends Import Duty On Solar And Wind Energy Equipment From Jiangsu

indiatimes.com

Via economictimes.indiatimes.com

NEW DELHI: Anti-dumping authorities have recommended action against key Chinese components for windmills, and are considering a similar petition for solar equipment, delivering another blow to the flood of cheap imports from Beijing and potentially arresting the steep fall in renewable energy tariffs.

The Directorate General of Anti-Dumping and Allied Duties (DGAD) has recommended imposing anti-dumping duty on castings imported from China for use in the construction of wind turbines.

The duty suggested varies between 6.57 per cent and 32.95 per cent for different Chinese companies, six of which are specifically named.

Indian authorities have been increasingly acting against cheap Chinese imports, which Indian manufacturers say are routinely priced below cost of production and have contributed to India’s trade deficit of $51 billion with China.

Last week, China’s state-run newspaper The Global Times reported that India initiated 12 investigations against Chinese products in the first half of this year, becoming the country with the most trade-remedy probes against China. DGAD had initiated an inquiry into the import of castings from China in early 2016 following a petition filed by Larsen & Toubro.

L&T subsequently sold off its Coimbatore plant to Brandken India Pvt Ltd in March 2016, but authorities found merit in its complaint.

 

The report on the investigation concludes that the castings were being “exported to India from the subject country (China) below normal values” and that “the domestic industry has suffered material injury” on account of such exports. ET reviewed a copy of the report.

“Having initiated and conducted the investigation into dumping, injury and the causal link thereof in terms of the rules and having established positive subsidy margins as well as injury to the domestic industry causal link thereof in terms of the rules and having established positive subsidy margins as well as injury to the domestic industry caused by such subsidised imports, the authority is of the view that imposition of anti-dumping duty is required to offset dumping and injury,” it said.

Castings comprise a number of vital parts of a wind turbine, including the hub, mainframe, various shafts, axles and more.

 

Wind industry insiders said they add up to about 3 per cent of the total cost of the turbine and that once the anti-dumping duty is imposed, their cost could go up by 5-20 per cent. Wind energy tariffs dropped spectacularly from the previous Rs 4-5 per kwH to Rs 3.46 per kwH in the first and only auction of wind projects held in February this year, but the imposition of anti-dumping duty now could reverse the trend unless developers absorb the extra cost.

“The cost of setting up a wind project will rise by about Rs 30 lakh per MW to Rs 50 lakh per MW,” said Madhusudan Khemka, managing director at ReGen Powertech, one of the leading wind turbine manufacturers. A wind developer who did not want to be named said, “Unless the cost is passed on, our internal rate of return (IRR) will fall by about 2 per cent.”

A number of other manufacturers contacted by ET, however, refused to respond. The development is likely to set off alarm bells among solar developers as well, because solar equipment manufacturers have also filed a similar petition with DGAD in June this year against dumping of Chinese solar cells and modules.

Solar tariffs have also fallen steeply in recent years, thanks to cheap imports from China, but if the manufacturers’ plea is upheld, tariffs are bound to rise.

The DGAD report recommending anti-dumping duty on castings from China specifically names six Chinese companies and the duties they should be slapped with: Zhejiang Jiali Wind Power Technology, 6.27 per cent; Jiangsu Sinojit Wind Energy Technology and its associate companies, 14.44 per cent; Yeong Guan Energy Tech Group, 15.46 per cent; Dalian Huarui Heavy Industry Casting, 18.48 per cent; Nangtong Hongde Mechanical, 18.64 per cent; and Jiangsu Faw Foundry, 28.83 per cent. A uniform duty of 32.95 per cent has been recommended for all other Chinese suppliers.

 

 

 

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