DGTR Recommends Continuation of Safeguard Duty on Solar Cells

DGTR has recommended the continued imposition of the safeguard duty on import of solar cells for one more year to protect domestic manufacturers

The Directorate General of Trade Remedies (DGTR), under the Ministry of Commerce, has recommended the continued imposition of the safeguard duty on import of solar cells for one more year to protect domestic manufacturers and discourage cheap imports.

In its probe, the DGTR has concluded that after a decline in imports in 2018-19 due to the imposition of safeguard duty on “solar cells whether or not assembled in modules or panels”, imports had again increased during April-September 2019 period then the rate of the safeguard duty had reduced on July 30, 2019.

In a notification, the directorate has said that there has been a significant increase in imports of the cells.

“The domestic industry is continuing to suffer a serious injury which is evidenced from an overall consideration of its performance, particularly on the basis of its capacity utilisation which is sub-par considering the demand of the product, increasing levels of inventory and negative profitability, it has said. Though the domestic industry has improved its production and sales and reduced its losses, its position continues to be fragile and would relapse into a further serious injury if the safeguard duty is discontinued, it added.

Further stating that the imports of the cells into India, have not only continued to cause serious injury to the domestic industry but also threaten to cause serious injury to the domestic producers and “it will be in the public interest to continue the imposition of safeguard duty” on the imports.

“It is noted that the domestic industry has sought extension of the safeguard duty further for a period of four years…Keeping in view that two years of protection has already been provided and the domestic industry has improved its position but needs some more time to adjust, an extension of safeguard for a period of another one year would be adequate,” it issued.

The directorate has recommended 14.9 percent duty for the first six months from July 30, this year, and 14.5 percent from the next six months. The finance ministry will now issue a formal notification for the imposition of these duties, once they are all approved.

The directorate has also concluded that the cost on the solar power developers and the ultimate consumer will increase as a result of the imposition of the safeguard duty, however, “imposition of safeguard duty would be in the public interest because it will prevent complete erosion of manufacturing base of the solar industry in the country which has made substantial investments.”

The probe was conducted after an application dated January 15, 2020, was filed before the DGTR by the Indian Solar Manufacturers Association (ISMA) on behalf of three Indian producers – Mundra Solar PV Ltd, Jupiter Solar Power Ltd, and Jupiter International Ltd for the continued imposition of the existing safeguard duty against imports of the cells.

Dr. Hitesh Doshi, Chairman of the All India Solar Industries Association said that the “Government of India has taken good step to save module manufacturers in India. We are thankful. Today at the module level there is more than 50 percent value addition and highest direct and indirect employment.

“15 percent duty is not enough to stop dumping in our country, still this good step for the country and we appreciate the same. We are looking forward to more tariff and non-tariff base barriers to stop dumping in our country.”

India had first imposed the duty on imports from China and a few other countries on July 30, 2018, for two years.