(Yicai) Oct. 26 -- The Indian government’s tax department is investigating 40 Chinese photovoltaic companies, but no one’s business has been affected yet, an industry insider told Yicai in response to recent rumors. This comes hot on the heels of a crackdown on Chinese mobile phone manufacturers.

The investigation has lasted for nearly a month, and Chinese solar firms are assisting in the probe, the person said. No one has been arrested and companies are operating as normal.

Should the results of the probe point to tax evasion, there may be huge fines, the person said. The price of solar panels in China is lower than the production cost. If this situation occurs abroad, it could be construed as dumping.

Last year, the Indian government launched an investigation into Chinese smartphone manufacturers and several, including Huawei Technologies and Xiaomi, were slapped with hefty fines for alleged tax evasion, money laundering and other offences.

India is the world’s third-largest PV market and is highly dependent on imports, especially from China. India imported USD3 billion of solar panels from 2021 to 2022, 92 percent of which came from China, according to Indian government data.

In order to protect local industries, India has imposed a series of trade restrictions on Chinese PV products in recent years, including levying a basic tariff of 40 percent on solar panels and 25 percent on PV cells from April 2022.

In May 2021, India’s Ministry of Commerce and Industry launched an anti-dumping investigation into solar products originating from China, Thailand and Vietnam. This ended in November last year after the applicant withdrew the accusation.

Editors: Dou Shicong, Kim Taylor