DGTR Begins Review for Extension of Safeguard Duty on Solar Cells

DGTR has begun a probe on whether to continue with the imposition of safeguard duty on solar cells following an application made by domestic companies

The Directorate General of Trade Remedies (DGTR), under the Ministry of Commerce and Industry, has notified that it has begun a probe on whether to continue with the imposition of safeguard duty on solar photovoltaic (PV) cells following an application made by domestic companies for the same.

An application for review and extension of safeguard duty for a period of four more years has been filed by Mundra Solar PV, Jupiter Solar Power, Jupiter International, through the Indian Solar Manufacturers Association (ISMA). The local manufactures have sought continued imposition of the safeguard duty imposed on imports of ‘solar cells whether or not assembled in modules or panels’ into India to protect the domestic producers from an increase in imports, according to a notification of the Directorate General of Trade Remedies (DGTR).

“On the basis of the prima facie evidence submitted by the domestic industry regarding evidence of serious injury and that the domestic industry is adjusting positively, the DGTR hereby initiates a review investigation for examining the need for the continued imposition of safeguard duty,” the department has stated.

Earlier in July 2018, the government had imposed safeguard duty for a period of two years on the import of solar cells from China and Malaysia, which will expire this year on July 29, 2020.

As per the notification of the finance ministry, 25 percent safeguard duty was imposed from July 30, 2018, to July 29, 2019, which was reduced to 20 percent during July 30, 2019, to January 29, 2020, and now at 15 percent starting January 30, 2020, to July 29, 2020.

The period of investigation for the present probe will be from April 2016 to September 30, 2019. This “period is long enough to take into consideration the market conditions and other factors that are relevant for ascertaining the need for the continued imposition of safeguard duty,” it said.

While the success or failure of the first two years is up for debate. The view in the Ministry of New and Renewable Energy is positive. In July 2019, Minister of State for Power and New and Renewable Energy, RK Singh, had informed the Rajya Sabha that “India generated over 81 thousand million units (MU) of solar power in the last three financial years (2016-17 to 2018-19).” Further adding that, “the sector witnessed no slowdown in generation capacity due to the imposition of the safeguard duty. And that according to data furnished by the Central Electricity Authority (CEA), there was an increase in the power generated from solar power plants by 13,797 MUs in the financial year (18-19) from the previous year (17-18).”