Men walk past solar panels on the roof of the Yamaha Motor Co. plant in Surajpur, Uttar Pradesh, India (Photographer: Prashanth Vishwanathan/Bloomberg)

Commerce Ministry Recommends Safeguard Duty On Solar Cells

The commerce ministry today recommended imposition of safeguard duty for two years on solar cells imports to protect domestic players from steep rise in the inbound shipments of the product.

After concluding the investigations, Directorate General of Trade Remedies said that the increased imports of solar cells (whether or not assembled in modules or panels) in India have caused "serious injury" and "threaten to cause serious injury" to the domestic producers of the product.

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

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

Also read: The Solar Market Could Contract for the First Time Ever

The duty recommended by the directorate is 25 percent in the first year, to gradually come down to 20 percent in the six months of second year and then 15 percent in the remaining six months. However, the finance ministry will take the final call to impose the duty.

Solar panels stand at a solar farm in Nakhon Nayok, Thailand. (Photographer: Brent Lewin/Bloomberg)
Solar panels stand at a solar farm in Nakhon Nayok, Thailand. (Photographer: Brent Lewin/Bloomberg)

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.

"This is an increase of 671 percent in 2017-18 (annualised) (668 percent as per actual) from the base year 2014-15. Thus, there is no doubt that the import volumes have increased significantly each year," it added.

An application dated Nov. 28, 2017 has been filed before the DGTR on Dec. 5, 2017 by the Indian Solar Manufacturers Association 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. The applicants had, therefore, 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 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 percent of the total inbound shipments in the country.

Also read: Solar Tariffs Remain at Record Low in India's Largest Auction