The government has imposed safeguard duty on solar cells for one more year till July 2021 to protect domestic manufacturers and discourage cheap imports from countries like China.
The move followed recommendation by the commerce ministry's investigation arm Directorate General of Trade Remedies (DGTR) for continued imposition of the duty for one more year.
In its probe, the DGTR had concluded that after a decline in imports in 2018-19 due to the imposition of safeguard duty on “solar cells whether or not assembled in modules or panels”, imports have increased during April-September 2019 due to reduction in rate of the duty from July 30, 2019.
After considering the findings of the DGTR, the department of revenue in a notification has said that it is imposing "a safeguard duty" on the product.
The department "seeks to continue the levy of safeguard duty on imports of solar cells whether or not assembled in modules or panels for a period of one year, in pursuance of final findings of review investigations issued by DGTR," it said.
A duty of 14.9 percent will be levied during July 30, 2020, to January 29, 2021, and then 14.5 percent during January 30, 2021, to July 29, 2021, it added.
The directorate had stated that there has been a significant increase in imports of the cells.
"The domestic industry is continuing to suffer serious injury which is evidenced from an overall consideration of its performance, particularly on the basis of its capacity utilisation which is sub-par considering the demand of the product, increasing levels of inventory and negative profitability,” it had said.
Imports of solar cells and modules increased to 9,790 MW in 2017-18 from 6,375 MW in 2016-17. The duties were put in place on July 30, 2018. As a consequence, the import volume came down to 8,010 MW in 2018-19.
India imposed the duty for the first time on July 30, 2018, for two years. China accounts for nearly 80 percent of module supplies in India.The renewable energy ministry has also proposed imposing customs duties on some solar power equipment as part of the country's goal of becoming self-sufficient.