Duty Mooted to Take Wind Out of Chi­nese Im­ports

DGAD sug­gests duty on cheaper Chi­nese windmill parts to off­set dump­ing

The Economic Times - - Front Page - Kaavya.Chan­drasekaran @times­group.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% and 32.95% 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 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% of the to­tal cost of the tur­bine and that once the anti-dump­ing duty is im­posed, their cost could go up by 5-20%. Wind en­ergy tar­iffs dropped spec­tac­u­larly from the pre­vi­ous .₹ 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 an­tidump­ing 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%.” 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, be- cause 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%; Jiangsu Si­no­jit Wind En­ergy Tech­nol­ogy and its as­so­ciate com­pa­nies, 14.44%; Yeong Guan En­ergy Tech Group, 15.46%; Dalian Huarui Heavy In­dus­try Cast­ing, 18.48%; Nang­tong Hongde Me­chan­i­cal, 18.64%; and Jiangsu Faw Foundry, 28.83%. A uni­form duty of 32.95% has been rec­om­mended for all the other Chi­nese sup­pli­ers.

Chi­nese cast­ings are al­ready sub­ject to a coun­ter­vail­ing duty of 13.44% im­posed in early 2016.


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