India levies 25% import tariff on Chinese, Malaysian solar panels

Domestic players are disadvantaged, trade ministry says.

India will impose a 25% safeguard duty on imported solar panels, the trade ministry revealed, amidst urgent calls from domestic industry players.

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An in-depth report by the Directorate General of Trade Remedies showed that imports of solar panels have surged in recent years, mostly from Chinese and Malaysian manufacturers.

However, despite the rapid expansion in domestic demand, the market share of the domestic industry players has decreased. Local manufacturers had a market share of 8% in 2014-2015, but this contracted to a measly 3% during 2017-2018 whilst the market share of imports increased from 90% to 93% over the same period. 

“The increased imports of [solar panels] into India, have caused serious injury and threaten to cause serious injury to the domestic producers of [solar panels] and it will be in the public interest to impose safeguard duty on imports of [solar panels] into India,” the ministry’s report said.

The report noted that there was a significant price undercutting by the imported goods, preventing domestic players from increasing their prices and resulting in substantial losses.

Domestic sales increased to 314MW in 2017-2018, an increase of 199MW compared with the same period in 2014-2015. In the same period, however, sales of imported panels surged by 8,558MW.

“It is clear that the increased imports of [imported solar panels] have substituted for the domestic production in meeting domestic demand The domestic industry must be protected against the sudden and sharp surge in imports,” the report noted.

However, the ministry was quick to point out that the safeguard duty is not an import embargo. “The safeguard duty is not a quantitative restriction. Therefore, there is no embargo on procurement of [solar panels] by way of imports. Even in a situation where the domestic industry has the capability to meet the demand [for solar panels], the effect of safeguard duty is that the domestic producers raise their prices to recover their cost, earn a reasonable return and to implement their adjustment plan,” it said.