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Solar cells: Government drops safeguard duty
Why in the news ?
- The finance ministry suspended the implementation of a safeguard duty on imported solar cells following a stay order by the Orissa High Court.
More on news
- The Centre had imposed a safeguard duty of 25% on solar cells imported from China and Malaysia for the period from July 30, 2018, to July 29, 2019.
- Several firms had filed writ petitions in the Orissa High Court against the imposition of the duty.
- While the safeguard duty was meant to help the domestic solar cell manufacturers, sector analysts and industry players said that not only was the period of two years too little to provide any real benefit, but also that the safeguard duty would adversely impact ongoing solar projects dependent on imported cells.
Background
- India imports over 90% of its solar equipment from China.
- The Directorate General of Trade Remedies (DGTR) had recommended imposing a safeguard duty for two years on solar cells and modules imported from China and Malaysia.
- The development comes against the backdrop of protectionism gaining traction globally, resulting in new tariff and non-tariff barriers.
- Earlier this year, US President Trump also decided to levy tariff on imported solar panels.
- Trump imposed a 30% tariff on imported solar cells and module in the first year, with the duties declining to 15% in the fourth year.
- In the last three years, India has initiated more than 130 anti-dumping/countervailing duty/safeguard cases to deal with the rising incidence of unfair trade practices and to provide a level playing field to the domestic industry.
Source
The Hindu