China border stand-off may impact solar module imports

The solar industry is abuzz with news that the Centre will soon announce a ‘safeguard duty’ on solar modules imported from China. Sources in the industry noted that the move could also serve as a means of hinting to the Chinese, India’s arsenal of economic response to the border stand-off.

‘Surge’ in imports

Industry sources said the government prefers the safeguard duty over the anti-dumping duty because, for the anti-dumping levy, the government would first have to prove dumping or sale below manufacturing costs. Safeguard duty, in contrast, is the levy that the World Trade Organisation rules allow a country to impose on imports when there is a sudden surge in imports from a country. Imports of solar modules from China is a classic case of ‘surge’.

In the five years between 2012-13 and 2016-17, when India’s solar module imports rose four times, imports from China increased seven times. Also, the share of solar modules in India’s total imports from China increased during the period, from just 0.75 per cent in 2012-13 to 4.60 per cent last year.

Anand Kumar, Secretary, Ministry of New and Renewable Energy, told Business Line that the government is determined to do everything possible to support the domestic industry, but did not wish to comment on specific measures. He said a safeguard duty was one of the options with the government.

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