India Proposes 70 Percent Duty on China, Malaysia Solar Imports
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India Solar Safeguard Duty could impose a 70% tariff on Chinese and Malaysian solar cells and modules, citing serious injury, protecting domestic manufacturing, affecting imports, prices, tenders, and the 2017 record-low tariff trajectory.
The Important Points
A proposed 70% provisional tariff on Chinese and Malaysian solar cells and modules to protect India's domestic industry.
Proposed 70% safeguard duty on Chinese and Malaysian solar imports
Provisional duration recommended: 200 days by finance authorities
Aims to prevent serious injury and protect domestic manufacturing
India imports most cells; local capacity ~3 GW vs ~20 GW demand
Could disrupt tenders, pricing, and 2017 low-tariff trajectory
India, the largest importer of Chinese solar equipment, proposed a 70 per cent "safeguard duty" on cells and modules shipped from China, where solar is cheaper than grid electricity in many cities, and Malaysia, citing “threat of serious injury” to the domestic industry.
Acting on an application by five local cell and module makers, the Directorate General of Safeguards, Customs and Central Excise made the proposal in a document dated Jan. 5. It recommended the levy remain in effect for 200 days, as Germany saw a solar power boost amid broader energy concerns.
“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.
Globally, external shocks such as the coronavirus pandemic have stalled a third of new U.S. utility solar this year, according to one report.
India’s annual manufacturing capacity for solar cells is only around 3 GW, compared with the average requirement of 20 GW for its on-grid solar power sector, according to a government note last month. The rest has to be purchased on the international market, it said. The South Asian nation was the largest solar-cell and module importer from China last year, buying a third of that nation’s $8 billion of shipments from January through September, according to research by Bloomberg New Energy Finance.
The ministry’s document said China’s solar exports to India constituted 1.52 percent of its total global exports during 2012, a figure that surged to almost 22 percent in 2016.
“India’s solar story is built on Chinese panels, and the duty, if implemented, would mean the end of record low solar tariffs that we saw in 2017,” said Vandana Gombar, a BNEF analyst in New Delhi, even as India's solar growth slows in recent assessments.
The government’s proposal came after five domestic manufacturers — Adani Enterprises Ltd.-backed Mundra Solar PV Ltd., Indosolar Ltd., Jupiter Solar Power Ltd., Websol Energy Systems Ltd. and Helios Photo Voltaic Ltd. — filed an application on Dec. 5 seeking a duty on imports of solar cells “whether or not assembled in modules or panels.”
