DGS for 70% safeguard duty on solar equipment imports

The domestic industry had a market share of 14 per cent in 2014-15 which fell to 10 per cent during 2017-18.

Written by Deepak Patel | New Delhi | Updated: January 10, 2018 6:15:34 am
Directorate General of Safeguards, DGS, imported solar cells, solar panels, renewable energy, India renewable energy, solar electricity, solar power, indian express China has more than doubled its production capacity of solar cells from 11.12 GW in 2012 to 27.78 GW in 2016.

The Directorate General of Safeguards (DGS) has recommended a safeguard duty of 70 per cent on imported solar cells — whether or not assembled in modules or panels — for a period of 200 days as they are “imported into India in such increased quantities and under such conditions so as to cause or threaten to cause serious injury” to the domestic manufacturing.

India imports approximately 90 per cent of its solar cells – majority of them from China. According to DGS, despite the rapid expansion in domestic demand of solar cells, the market share of the domestic industry has decreased; the domestic industry had a market share of 14 per cent in 2014-15 which declined to 10 per cent during 2017-18.

“A public hearing will be held in due course before making a final determination, for which the date will be informed separately,” the DGS stated while making the recommendation for 70 per cent safeguard duty in its report dated January 5, 2018. This application for safeguard duty on imported solar cells was filed on November 28, 2017, by the Indian Solar Manufacturers Association (ISMA) on behalf of five Indian producers: Mundra Solar PV Limited, Indosolar Limited, Jupiter Solar Power Limited, Websol Energy Systems Limited and Helios Photo Voltaic Limited. “This preliminary finding is borne out from the data submitted by the domestic industry and it would be subject to further investigation by the authority,” the DGS added.

The five applicants — which collectively manufacture more than 50 per cent of Indian solar cells — claimed that on account of the surge in imports of the solar cells “many domestic producers have kept their production facilities almost idle and the heavy losses have crippled them”. For this reason, the applicants requested for imposition of provisional safeguard duty as a measure “to mitigate their injury”.

China has more than doubled its production capacity of solar cells from 11.12 GW in 2012 to 27.78 GW in 2016. “Further, data of 35 producers who collectively account for 57 per cent of solar cells and 67 per cent of solar modules production in China reveals excess capacity… This aspect of having a huge production base coupled with excess capacity have a bearing on the applicants’ case that there has been a surge in imports of the PUC from China,” the DGS stated.

“China’s export orientation in respect of the solar cell is unquestionable, but a material fact that emerges is that during the past two years, both its direction and volume of export trade changed in a significant manner towards India…. To illustrate, while China’s exports to India constituted a paltry 1.52 per cent of its total global exports during 2012, this increased to 21.58 per cent during 2016,” the DGS added.

According to the DGS, though the domestic industry established capacities to meet the growing demand for the solar cells, the “substantially increased” imports at consistently reducing landed prices have led to “idle production capacities, falling sales realization etc…and the domestic industry is incurring very heavy losses”.

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