Government imposes safeguard duty on solar cell imports for two years

India on Monday imposed safeguard duty on solar cells imports from China and Malaysia for two years to protect domestic players from steep rise in the inbound shipments of the product.

This comes following recommendations by the Directorate General of Trade Remedies (DGTR), under the commerce ministry.

As per the notification of the finance ministry, 25 per cent safeguard duty have 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.

"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," the notification said.

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

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

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

India has produced 842 MW solar cells in 2017-18. The period of investigation was 2014-15 to 2017-18.

The imports of the cells has 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 -- Mundra Solar PV Ltd, Indosolar Ltd, Jupiter Solar Power, Websol Energy Systems, and Helios Photo Voltaic -- seeking imposition of safeguard duty on the imports.

The applicants had claimed that on account of the surge in imports of the cells, many domestic producers have kept their production facilities almost idle and the heavy losses have crippled the domestic industry.

For this reason, the applicants had requested for 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.

India is targeting to 100 gigawatt (GW) solar capacity by 2022.

Solar cells, electrical devices that convert sunlight directly into electricity, are imported primarily from China, Malaysia, Singapore and Taiwan.

Imports of the cells from these countries account for more than 90 per cent of the total inbound shipments in the country.