Employees place a solar panel into a box at the Tata Power Solar Systems Ltd. manufacturing plant in Bangalore, India. (Photographer: Dhiraj Singh/Bloomberg)

India Says Solar Safeguard Duty Imposed After Court Delays

(Bloomberg) -- India’s finance ministry said a 25 percent safeguard duty on solar cells and modules imported from China and Malaysia has been imposed, providing some clarity on the protectionist move that had been caught up in court battles.

The tariff will be imposed in accordance with a notification originally published July 30, the finance ministry said in a document posted on its website Thursday. The development follows a decision earlier this week by India’s Supreme Court that overturned a lower court stay on the tariff.

“Developers as well as auctioning authorities can now proceed with their planned projects,” said Allen Tom Abraham, a New Delhi-based Bloomberg NEF analyst. “However, uncertainty persists in the process of approving cost pass-through for projects awarded prior to the announcement of duties.”

The safeguard duty may threaten Prime Minister Narendra Modi’s ambitious plan of installing 175 gigawatts of renewable capacity by 2022. While cheap imports helped efforts to reach that goal, domestic solar power equipment companies complained they were being undercut. Meanwhile, the country’s efforts to expand its own manufacturing capacity has been downsized and delayed.

The decision to impose safeguard duty will have ramifications on Indian solar developers in the short-term as it affects their project schedules, Yin Rongfang, president of global sales at Trina Solar Ltd., the world’s second-largest maker of solar cells, said Friday at a conference in New Delhi.

India’s Directorate General of Trade Remedies had originally issued a recommendation on July 16 to impose a two-year safeguard duty on solar equipment, saying the overseas supplies caused or threatened “serious injury” to domestic manufacturers.

©2018 Bloomberg L.P.