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25% safeguard duty on import of solar cells
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- India has imposed a 25% safeguard duty on solar cell imports for a year till July 29, 2019, said a government order published on Monday, as the country tries to protect the domestic solar industry.
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- According to the notification, the safeguard duty will not be imposed on imports from developing countries, except China and Malaysia.
- The federal trade ministry earlier this month recommended imposing a 25% duty on imports of solar cells and modules from China for one year to try to counter what it sees as a threat to domestic solar equipment manufacturing.
- India imports over 90% of its solar equipment from China.
- The safeguard duty on imports would be applicable for two years. It would be reduced in the second year to 20% for six months, and would be charged at 15% for the next six months, said the order.
- While the move is aimed at helping the domestic solar cell manufacturing sector, it could affect existing projects dependent on cheap imports.
Background
- 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, Live Mint