Anti-dumping duty should not hurt power firms, says Fortum India MD

With the Indian government taking a strong stand against imports in the renewable sector, Finnish energy major Fortum believes that power developers should be protected against any impact.

“I am sure both the proponents of those who support anti-dumping duty (ADD) and those who don’t, would have good amount of ammunition to fight it out and there is regulatory mechanism to decide on that. Amidst all of this, the developer should not be put in an unfair position. There should be a grandfathering for the past bids that anti-dumping should not apply to them,” said Sanjay Aggarwal, managing director, Fortum India.

India recently initiated an investigation into the dumping of solar panels coming from China, Malaysia and Taiwan — for the second time in the past three years. Fortum imports solar panels from Malaysia which, Aggarwal said, undergo strict quality tests.

“I can’t build in a duty now in my tariff. So, I don’t want to be unfairly targeted because of that. Clearly, it’s unfair that a developer needs to take a call on the ADD. There has to be a mechanism, by which the developer should be exempted. I would leave that to the authority but my project should not be impacted,” said Aggarwal.

The government is also bringing in a quality policy to filter inferior quality imports in the power sector Aggarwal, however, said the policy should be for both imports and indigenous products.

“DGAD (directorate of anti-dumping and allied duties) will decide how much reduction in tariff and its cascading effect helps the country vis-à-vis creation of this ADD. If we want to do 100 Gw, we have to add 20 Gw every year. We don’t have the manufacturing capacity to do that. Out of a capacity of 5 Gw, 1 Gw is cells, so the balance anyway comes from outside. Whether that Rs 1 tariff increase because of ADD creates ancillary, manpower and cascading effect versus how much advantage, if you were to start producing here, that is to be evaluated,” said Aggarwal.

Fortum has close to 225 Mw of solar projects in India and has distanced itself from free fall of tariff. Aggarwal said the company would put a bid only when it is financially viable.

“In a free market economy, it can’t be that all profits should go to the private sector and losses to the government. The pace of growth of solar in India seems to be driven by financial engineering around low bids and then technology follows, while it should be the opposite,” he said.

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