Finance Ministry extends safeguard duty on import of solar cells, modules

The Finance Ministry has extended the safeguard duty on imported solar cells and solar modules by another year as recommended by the Director-General of Trade Remedies (DGTR) earlier this month.

A safeguard duty rate of 14.90 per cent will be imposed on solar cells and modules starting for the first six months starting July 30 (minus anti-dumping duty payable, if any) and 14.50 per cent for the subsequent six months, as per a notification issued by the Finance Ministry on Wednesday.

The duties will not apply on any developing country with the exception of China, Thailand and Vietnam, the notification added.

Safeguard duties can be imposed on items, over and above existing customs duties, if it can be conclusively proved that a steep increase in imports over a period of time resulted in injury and disruption for local businesses.

The DGTR, under the Commerce and Industry Ministry, carried out an investigation for a possible extension of the safeguard duty based on requests made by the domestic industry. It observed that two years of protection has already helped the domestic industry improve its position, but it still needed some time to adjust. Therefore, a one-year extension of the safeguard duty should be allowed.

In July 2018, the DGTR had issued its findings on an application filed by five Indian producers through the Indian Solar Manufacturers’ Association seeking safeguard duties on imports of solar cells and panels. The complainants said the steep increase in imports of solar cells, whether or not assembled in modules or panels, was hurting local producers.

Based on the DGTR’s report, safeguard duties of 25 per cent were imposed from July 30, 2018, to July 29, 2019, and at 20 per cent from July 30, 2019, to July 29, 2020.