India- Safeguard Duty on Solar Cell Imports for Two Years

A safeguard duty on solar cells imported from Malaysia and China for two years was recently imposed by India to protect domestic players from the rise in the inbound shipments of the product.

This comes following recommendations by the Directorate General of Trade Remedies (DGTR). As per the notification of the finance ministry, 25 per cent safeguard duty has been imposed for July 30 to July 29, 2019, which will gradually come down to 20 per cent during July 30, 2019, to January 29, 2020, and 15 per cent during January 30, 2020 to July 29, 2020.

The notification said, "After considering the said findings of the DGTR...hereby imposes on subject goods (solar cells whether or not assembled in modules or panels)...when imported into India, a safeguard duty”.

DGTR in its investigations has stated that the increased imports of solar cells in India have caused "serious injury" and "threaten to cause serious injury" to the domestic producers.

The DGTR had said "It will be in the public interest to impose safeguard duty on the imports for a period of two years,”

It has also stated that there has been a significant increase in imports of the cells in absolute terms.

The imports of the cells have jumped to 9,790 MW in 2017-18 from 1,275 MW in 2014-15.

An application dated November 28, 2017, has been filed before the DGTR on December 5, 2017 by the Indian Solar

Manufacturers Association (ISMA) on behalf of five Indian producers -- Indosolar Ltd, Websol Energy Systems, Jupiter Solar Power, Mundra Solar PV Ltd, and Helios Photo Voltaic -- seeking imposition of safeguard duty on the imports.

The applicants had said that because of the increase in cell imports, many domestic producers have kept their production facilities almost idle and the heavy losses have slowed down the domestic industry.

For this reason, the applicants had requested for the imposition of the provisional duty as a measure to mitigate their injury.

The DGTR is mandated to investigate the existence of serious injury or threat of serious injury to the domestic industry as a consequence of increased import of an article into India.

Imports of the solar cells from Malaysia, China, Singapore and Taiwan account for more than 90 percent of the total inbound shipments in the country.