In an attempt to protect the business interest of Indian solar manufacturers, the Directorate General of Safeguards, Customs and Central Excise has proposed a 70 per cent safeguard duty on cells and modules shipped from China and Malaysia, according to a Bloomberg report.
The Central government official made the proposal in a document dated January 5 and recommended the levy remain in effect for 200 days.
“Existing critical circumstances justify the immediate imposition of a provisional safeguard duty in order to save the domestic industry from further serious injury, which would be difficult to repair,” the Finance Ministry said in the document, also citing the potential for job losses.
The new development comes a week after the agency reported the Central government is planning to levy a tariff on imported solar panels by tweaking the term ‘solar panels’ and reclassify them as ‘motors’ and put them under the taxed category.
The finance ministry then was considering the renewable-energy ministry’s request to tax panels imported for projects won under future solar auctions while exempting those already awarded.
Besides, the discussion on the proposed change began after the Directorate General of Anti-Dumping (DGAD) in July last year started a probe to ascertain if dumping of panel imports from China, Malaysia and Taiwan was hurting the domestic industry.
The investigation was in response to an application from the Indian Solar Manufacturers’ Association (ISMA), which had pleaded a retrospective duty be imposed on the importers as dumping of the modules has considerably damaged the prospects of the indigenous sector.
According to the finance ministry document, China’s solar exports to India constituted 1.52 per cent of its total global exports during 2012, a figure that surged to almost 22 per cent in 2016.
Even major domestic companies such as Tata Power, Adani Group, Jupiter Solar and Bhel are facing trouble to stay in the business amidst high cuts offered by Chinese manufacturers on solar panels.
In respect to the stiff competition from the Chinese players, domestic manufacturers such as Adani Enterprises-backed Mundra Solar, Indosolar, Jupiter Solar Power, Websol Energy Systems and Helios Photo Voltaic filed an application on Dec. 5 seeking a duty on imports of solar cells “whether or not assembled in modules or panels.”