India Reviewing Extension Of Safeguard Duty

• Indian solar manufacturers want existing safeguard duty on imported solar cells and modules to be extended for another 4 years
• The DGTR has accepted their application launching a review investigation to ascertain injury to domestic players
• The petition has also requested for domestic manufacturers operating from SEZ to be considered as local producers for the purpose of the investigation

The Indian Solar Manufacturers Association (ISMA) is demanding an extension of safeguard duties on imported solar cells from China and Malaysia for another 4 years. It has filed an application with the Directorate General of Trade Remedies (DGTR) that has now launched a review investigation.

The review investigation takes into account the period between April 1, 2016 to September 30, 2019. According to the prima facie evidence that DGTR shares about the applications filed, it sees imports of these products 'continued at increased levels despite the imposition of safeguard duty' and that imports still 'undercut and suppress the prices' of the domestic industry injuring the local manufacturers financially.

While the previous investigation considered solar cells as one unit, for the purpose of the review investigation, the DGTR will be considering the tariff items under two categories of 8541 4011: solar cells, not assembled and 8541 4012: solar cells assembled in modules or made up into panels. This was introduced by the Finance Ministry during the country's annual budget for 2020 (see INR 220Bn For Power & RE Sector In India For FY 2020-21).

ISMA has also petitioned the DGTR to include domestic players present in the special economic zone (SEZ) to be considered as domestic industry which wasn't the case during first time around.

Currently, the safeguard duty on imported solar cells – whether or not assembled in India in modules or panels – that has been imposed since July 30, 2018 will remain in effect till July 29, 2020 at a 15% rate. It started with 25% and since January 30, 2020 it has come down to 15%. ISMA, representing Mundra Solar PV Limited, Jupiter Solar Power Limited and Jupiter International Limited, wants this to be extended.

Imposition of safeguard duty has impacted the imports of Chinese products into India as its market share declined from 91.5% in Q1/2018 to 78% in CY 2019, which shows that the Asian solar giant still has continued to dominate India's module market (see Slowdown In Indian PV Market Lowers Solar Imports In CY 2019).