To protect the interests of the domestic industry and responding to the
application filed by an association of five domestic cell and module makers
including Adani Group, the Directorate General of Safeguards has recommended to
the Finance Ministry to impose “ a provisional Safeguard Duty at the rate of 70
percent ad valorem on the imports of solar cells whether or not assembled in
modules or panels” for a period of 200 days “"which is considered to be
the minimum period of time required to protect the interests of the domestic
India has annual manufacturing capacity for solar cells of around 3
gigawatts as against requirement of 20 GW.
DGS said import of solar equipment jumped from 1,271 MW in 2014-15 to 4,186 MW
in the next year and to 6,375 MW in 2016-17.
Current fiscal imports are pegged at 9,474 MW as compared to domestic
production of 1,164 MW.
"The growth rate of such imports as a percentage of the domestic
production was a remarkable 1,371 per cent during the intervening year 2015-16.
"Even the overall growth rate of the imports relative to its domestic
production is very significant, rising from 519 per cent in 2014-15 to 814 per
cent in 2017-18," it said.
Reasoning its decision, it said 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.
During the first half of 2016, Chinese exports to India were 18.51 per cent of
its total exports while the combined exports to EU and the US were 30.65 per
cent of its total exports.
The situation turned dramatically during the succeeding two half yearly
periods. In the second half of 2016, China's exports to India constituted 25.09
per cent while its exports to EU and USA fell to 15.12 per cent.
Again, in the first half of 2017, China's exports to India increased to a
staggering 38.77 per cent of its total exports while its exports to EU and the
US shrunk to just 5 per cent (of its total exports), it said.
"Such a significant shift in pattern of trade in which China started
targeting the Indian market more vigorously as compared to developed countries
/ markets like EU and USA etc could not have been foreseen," DGS said.
The five domestic manufacturers who had sought imposition of safeguard duty
included Adani-backed Mundra Solar PV Ltd, Indosolar Ltd, Jupiter Solar Power
Ltd, Websol Energy Systems Ltd and Helios Photo Voltaic Ltd
Before final duties or import taxes are levied, DGS will hold further
investigation into the injury caused by cheap imports. It would also hold a
public hearing on the issue.