India opened a probe into whether Chinese solar-equipment makers are hurting its domestic industry by dumping inventories and driving down prices to unfair levels.

“A causal link between the said dumping and injury exists to justify an initiation of an anti-dumping investigation,” according to a notification published on the website of the Directorate General of Anti-Dumping and Allied Duties. The probe will also include solar cells originating in or shipped from Taiwan and Malaysia.

Indian officials are the latest to join a growing list of countries targeting Chinese solar manufacturers. The U.S., the European Union extended anti-dumping duties on imports earlier this year. Turkey published a list of anti-dumping fees for Chinese photovoltaic imports in April. 

China said India should conduct its anti-dumping probe strictly adhering to rules and avoid abuse of trade-remedy measures, according to a statement on the microblog of its Ministry of Commerce. It offered to solve problems in trade through cooperation.

India’s probe and China’s response come in the shadow of elevated border tensions between the Asian neighbors over territory in a remote area of the Himalayas, one of the most serious flareups since a border war in 1962. Those tensions come against the backdrop of a tussle for influence in the region.

China is the world’s biggest solar manufacturer and India is its second-biggestmarket, with imports worth $3.2 billion for the financial year ending March 31, according to research by Bloomberg New Energy Finance.

Level Field

Chinese solar goods dumped in India have undercut prices by almost 40 percent, according to the Indian Solar Manufacturers Association, the industry body which petitioned for the investigation.

"For Chinese modules, this price is at 30 cents a watt compared with over 40 cents a watt for Indian products," said Dhruv Sharma, a coordinator for the association, said by telephone.

ISMA represents companies with 3.5 GW of cell manufacturing capacity and 80 percent of the country’s 8 GW of panel manufacturing capacity in India. The green energy arms of Indian Adani Group and Tata Group are part of ISMA and support levying anti-dumping duties on Chinese imports.

Tata Power Solar, with 400 MW of module and 300 MW of cell manufacturing capacity, says Indian manufacturers are struggling to compete.

"If it’s a level playing field and if the subsidy portion given to Chinese can be quantified and can be provided as an incentive or penalties placed, there is no reason why Indians cannot compete with Chinese products," Tata Power Solar Systems Ltd. Chief Executive Officer Ashish Khanna said in an interview.

While Chinese imports may have hurt local manufacturers, they’ve supported Prime Minister Narendra Modi’s goal of installing 100 gigawatts of solar energy by 2022. Cheap cells and modules from China have enabled tariffs in India to fall to one of the lowest in the world.