DG
Safeguards Initiates Investigation on Solar Cells on ISMA Complaint on behalf
of Five Producers
[Ref: F. No. D 22011/68/2017 – Dated
19-12-2017]
Subject: Initiation of a Safeguard investigation concerning imports of
“Solar Cells whether or not assembled in modules or panels” into India.
G.S.R.
1522(E).—An application dated 28.11.2017 has been filed
in this office on 05.12.2017 under Rule 5 of the Customs Tariff (Identification
and Assessment of Safeguard Duty) Rules, 1997 by the Indian Solar
Manufacturer’s Association (ISMA) on behalf of five Indian producers, namely (i) M/s Mundra Solar PV Limited, Adani House, Meetha Khali 6 Road,
Navrangpura, Ahmedabad-380009, Gujarat; (ii) M/s Indosolar Limited, 3C/1, EcoTech-II,
Udyog Vihar, Dist: Gautam Budh
Nagar, Greater Noida-201306, Uttar Pradesh; (iii) M/s Jupiter Solar Power
Limited, Village Katha, Post Office Baddi, Teh. Nalagarh, Dist. Solan, Himachal Pradesh-173205; (iv) M/s Websol Energy Systems Limited, Falta
SEZ Sector-II,Falta, Dist:
24 South Praganas, West Bengal-743504; and (v) M/s
Helios Photo Voltaic Limited, 43B, Okhala Industrial
Estate, Phase-III, New Delhi-110020, through M/s. Athena Law Associates, 808,
L&T Building, Sector 18B, Dwarka, New
Delhi-110075 seeking imposition of Safeguard Duty on imports of “Solar Cells
whether or not assembled in modules or panels” [hereinafter referred to as
“Product Under Consideration” or “PUC”] into India to protect the domestic
producers of like and directly competitive articles (to the PUC) from serious
injury / threat of serious injury caused by such increased imports.
2. Domestic
Industry (DI): The applicants claim that their collective
production accounts for more than 50% of the total production of the PUC in
India. They contend that by virtue of this fact, they represent a major
proportion of the total Indian or domestic industry of the PUC and, therefore,
they have the standing to file the present application and be treated as the
DI.
3. Product Under Consideration (PUC): The
product under consideration is “Solar Cells whether or not assembled in
modules or panels” classifiable under Tariff Heading 85414011 of Chapter 85
of the Customs Tariff Act, 1975. Photovoltaic Solar Cells are also known as
Photovoltaic Cells in the market / trade parlance. Photovoltaic technology
enables direct conversion of sunlight into electricity at the atomic level.
Solar Cells are solid state electrical devices that convert sunlight directly into
electricity by the photovoltaic effect. To make practical use of the Solar
Cells, these are placed in panels or modules. In other words, a solar panel /
module is a packaged, connected assembly of Solar Cells. The electrical
connections are made to the Solar Cells in series to achieve the desired output
wattage and / or in parallel to provide the desired current capability. The
Customs tariff classification is indicative only and is in no way binding on
the scope of the present investigation.
3.1 There are
two major technologies that are available for manufacturing the PUC. The first
technology is known as “Crystalline Silicon (c-Si)” based technology, also
referred to as silicon wafer based technology. Crystalline Silicon includes
n-type and p-type silicon, and also mono crystalline and multi crystalline
silicon materials. The second technology is referred to as “Thin Film”
technology wherein amorphous silicon, cadmium tellurium (CdTe)
or copper indium gallium selenium are used as semiconductor materials. Solar
Cells made by using both c-Si technology and Thin Film technology are imported
into India.
3.2 The
applicants claim to manufacture Solar Cells using c-Si Technology and not by
using Thin Film Technology. The applicants further state that Solar Cells made
by using both Crystalline and Thin Film technologies are used in comparable
applications or end uses and there are no material differences between such
Solar Cells though the technology used may be different. Therefore, the
applicants claim that the domestically produced Solar Cells based on c-Si
technology are like and directly competitive articles to the imported Solar
Cells originating from the use of either c-Si technology or Thin Film
technology.
4. Period
of Investigation (POI): The applicants have submitted the
relevant data of imports, production etc. for the period 2014-15 to 2017-18 (upto September 2017). The POI selected is 2014-15 to
2017-18 (Annualised) which suffices to take into
consideration the market conditions and other factor that are relevant for
ascertaining the need for imposition of Safeguard Duty.
5. Source
of Information: The applicants have provided
transaction-wise import data for the PUC from (i)
Directorate General of Commercial Intelligence & Statistics (DGCI&S),
Department of Commerce for the period 2014-15 to 2017-18 (upto
June 2017) and (ii) M/s Infodrive Media for the
period 2017-18 (July to September 2017) and the same has been taken into
consideration for analysis. The applicants have also provided data in respect
of their own production, sales, inventory etc. for the period 2014-15 to
2017-18 (upto September 2017).
6. Increase
in Imports (absolute & in relative terms): The PUC
is imported into India primarily from China PR, Malaysia, Singapore and Taiwan.
Taking into account the base year as 2014-15, the documents on record reveal
that the imports of the PUC have increased over a period of time in absolute
terms. In relative terms also, the imports have increased appreciably as
compared to the base year.
|
Particulars |
Unit |
2014-15 |
2015-16 |
2016-17 |
2017-18 |
2017-18 |
|
|
|
|
|
|
(Upto Sept.,2017) |
(Annualized) |
|
Total
Imports |
MW |
1,275 |
4,186 |
6,375 |
4665 |
9,331 |
|
Indian Production |
MW |
246 |
305 |
798 |
544 |
1,164 |
|
Imports as a % of Indian
Production |
|
519 |
1,371 |
799 |
858 |
802 |
7. Serious
Injury: The applicants claim that the increased
imports of the PUC have caused and are threatening to cause serious injury to
the DI engaged in manufacture of products which are like and directly
competitive (to the PUC), as indicated by the following factors:
(a)
Production: The production and demand of the PUC
increased during the period of investigation, whereas, the production of the DI
as a percentage of demand declined sharply during the POI, as shown in the
table below.
|
Particulars |
Unit |
2014-15 |
2015-16 |
2016-17 |
2017-18 (Upto Sept.,2017) |
2017-18 (Annualised) |
|
Installed Capacity |
MW |
392 |
573 |
653 |
727 |
1,653 |
|
Production of DI |
MW |
237 |
295 |
473 |
381 |
838 |
|
Demand |
MW |
1,475 |
4,470 |
7,157 |
5,186 |
10,430 |
|
% of production of DI with
respect to demand |
|
16 |
7 |
7 |
7 |
8 |
(b) Change
in the Sales and Market Share of domestic producers in demand: Despite
rapid expansion in demand, the sales and market share of the DI has more or
less remained constant in recent years and has, in fact, decreased sharply when
compared to the base year, 2014-15. The DI had a market share of 13% in 2014-15
which declined to 7% during 2017-18 (A). During the same period, the market
share of imports increased from 86% to 90%, as shown in the table below.
|
Year |
Total
Import (MW) |
Sales
of DI (MW) |
Sales
of Indian Producers other than DI (MW) |
Total
Demand (MW) |
Market
Share (%) |
||
|
|
|
|
|
|
DI |
Import |
Others |
|
2014-15 |
1,275 |
191 |
9 |
1,475 |
13 |
86 |
1 |
|
2015-16 |
4,186 |
276 |
8 |
4,470 |
6 |
94 |
0 |
|
2016-17 |
6,375 |
457 |
325 |
7,157 |
6 |
89 |
5 |
|
2017-18 (Upto
Sept.,2017 |
4,665 |
358 |
163 |
5,186 |
7 |
90 |
3 |
|
2017-18 (Annualised) |
9,331 |
774 |
325 |
10,430 |
7 |
90 |
3 |
(c)
Capacity Utilisation: The
production facilities of the DI were under-utilised
during the entire POI and the capacity utilisation declined
significantly, as evident from the table below.
|
Particulars |
Unit |
2014-15 |
2015-16 |
2016-17 |
2017-18 |
2017-18 (Annualised) |
|
Installed
Capacity |
MW |
392 |
573 |
653 |
727 |
1,653 |
|
Production
of DI |
MW |
237 |
295 |
473 |
381 |
838 |
|
Capacity Utilisation |
|
60% |
52% |
72% |
53% |
51% |
(d)
Employment: The trend of employment given by the DI
demonstrates a declining trend throughout the POI. No doubt, the recent entry
of one applicant, M/s Mundra Solar PV Limited (M/s
MSPVL) in May 2017 has resulted in an increase in the total number of
employees, but this is not reflective of the industry trend. In fact, if the
number of employees of M/s. MSPVL is removed, the declining trend in the
employment of the industry as a whole is evident, as shown in the table below.
Further, the DI has claimed potential loss in employment opportunity as they are
operating far below their installed capacity, as indicated at (c) above.
|
No. of Employees |
2014-15 |
2015-16 |
2016-17 |
2017-18 (Upto Sept.,2017) |
|
Excluding
M/s MSPVL (Indexed) |
100 |
135 |
128 |
127 |
|
Actual
including M/s MSPVL (Indexed) |
100 |
135 |
128 |
460 |
(e) Profit / Loss: The DI has incurred losses on
domestic sales over the POI, as shown in the table below.
|
Particulars |
2014-15 |
2015-16 |
2016-17 |
2017-18 (Upto Sept.,2017) |
2017-18 (Annualised) |
|
Profit in
Rs. Lakhs (Indexed) |
100 |
(-)351 |
(-)146 |
(-)341 |
(-)150 |
|
Profit in
Rs./Watt (Indexed) |
100 |
(-)243 |
(-)61 |
(-)84 |
(-)80 |
(f)
Inventory: The table below depicts that the inventory of
the DI has increased by 4 times (approx.) over the POI. This is indicative of
loss of market space on account of surge in imports.
|
Particulars |
2014-15 |
2015-16 |
2016-17 |
2017-18 (Upto Sept.,2017) |
|
Closing
Inventory (Indexed) |
100 |
82 |
147 |
416 |
The
applicants have requested for immediate imposition of Safeguard measures for a
period of four years. The applicants have also requested for imposition of
provisional Safeguard duty in view of steep deterioration in the performance of
the DI, as a result of increased imports of the PUC.
8. The application
has been examined and it has been found that prima facie the increased imports of the PUC have caused and are
threatening to cause serious injury to the DI of products that are like and
directly competitive to the PUC. Accordingly, it has been decided to initiate
an investigation through the issue of this Notice.
9. All
interested parties may make their views known within a period of 30 (thirty)
days from the date of this Notice to:
The Director General (Safeguards)
Bhai Vir Singh Sahitya
Sadan: 2nd Floor, Bhai Vir
Singh Marg,
Gole Market,
New Delhi-110 001, INDIA. Telefax: 011-23741542/ 23741537
E-mail: dgsafeguards@nic.in
11. All
known interested parties including the known exporters in the subject
countries, the Government of the subject countries through their Embassy in
India, the importers and users in India are also being addressed separately.
12. Any
other party who wishes to be considered as an interested party may submit a
request to this effect to the Director General (Safeguards) at the
aforementioned address within 15 days from the date of this Notice.
13. A
public file containing all relevant material (non-confidential) shall be
available for inspection by all interested parties in the office of the
Director General (Safeguards) on the aforementioned address.
[F. No. D 22011/68/2017]