DGTR To Review Continued Imposition of Safeguard Duty on Solar Cells and Modules Imports

ISMA has filed an application seeking continued imposition of safeguard duty


The Directorate General of Trade Remedies (DGTR) is initiating a review investigation, for examining the need for the continued imposition of safeguard duty on the import of solar cells and modules against an application filed by the Indian Solar Manufacturers Association (ISMA) seeking continued imposition of safeguard duty for another four years.

ISMA submitted the petition on behalf of domestic manufacturers Mundra Solar PV Limited (Adani), a unit in a special economic zone (SEZ unit), Jupiter Solar Power Limited, and Jupiter International Limited, both groups in the domestic tariff area (DTA).

The period of investigation for the present investigation is from April 1, 2016, to September 30, 2019. The Director-General may, however, at its discretion, consider data after these dates mentioned, if necessary.

In July 2018, the scope of the domestic industry was restricted to DTA units and export-oriented units (EOU). Now, the review application filed by three applicants, which includes two units in the DTA and one unit in SEZ, is requesting the reconsideration of the original decision of excluding SEZ units from the domestic industry.

Following the request, the Director-General has considered the scope of the domestic industry restricted to  DTA  units. Therefore,  Jupiter  Solar Power Limited and Jupiter International Limited, which account for a significant proportion of the total production of solar cells in  India are considered as a domestic industry.

Earlier, imported solar cells and modules were classified under the tariff item 8541 40 11. However, since these items were split into two; 8541 40 11 (solar cells not assembled) and 8541 40 12 (solar cells assembled in modules or made up into panels) during the recent the budget session by the Ministry of Finance (MoF), the current investigation is taking both these tariff items into consideration for continuation of safeguard duty imposition application.

The domestic manufacturers filing the petition have provided import data released by the Department of Commerce from 2014-15 to 2019-20 (up to September 2019) for this investigation.

So, in response to the application by the domestic manufacturers that states that the domestic industry is facing serious injury but is adjusting positively, the Director-General is now initiating a review investigation. The investigation aims to examine the need for the continued imposition of safeguard duty on the import of solar cells and modules.

The DGTR has asked the concerned parties to submit any information related to the investigation within 30 days of receiving the notice.


In December 2017, the original investigation was initiated on the application filed by five domestic manufacturers through ISMA including Mundra Solar PV Limited, Indosolar Limited, Jupiter Solar Power Limited, Websol Energy Systems Limited, and Helios Photovoltaic Limited, seeking the imposition of safeguard duty against the imports of solar cells and modules from China, Malaysia, Singapore, and Taiwan. These five companies claimed that they collectively manufacture more than 50% of solar cells produced in India.

The DGTR issued final findings in July 2018 based on which safeguard duty was imposed for two years.  The duty was set at 25% for the first year, followed by a phased down approach for the second year, with the rate reduced by 5% every six months until the duty is set to end after July 2020.

Since a majority of solar projects were already under development when the safeguard duty was announced in July 2018, they came under a clause called “Change in Law.” So, the solar projects that were auctioned before the imposition of the safeguard duty were eligible to get compensated or reimbursed for the increased project costs as a result of the duty. But Mercom’s research found that the solar developers have been struggling to get the reimbursement for their additional expenses. This has adversely affected their business and the pace of project development in the country.

The domestic solar module manufacturers also expressed their discontent months after the safeguard duty imposition. They stated that the policy had failed to achieve the desired objectives of protecting domestic manufacturers from a sudden surge of imports since the safeguard duty was imposed for only two years, and the implementation period of utility-scale solar projects is 18 to 24 months.

Though there is no official data, Mercom has been tracking about 140 module manufacturers in India. According to Mercom’s market share tracker, of the 140 module manufacturers, only about 40 have a manufacturing capacity of 100 MW and above. There are only about 16 solar cell manufacturers in India, of which only nine have a manufacturing capacity of 100 MW or more. Again, most of these cell manufacturers also have module manufacturing units which utilize most of their cell production.

Many micro, small, and medium enterprises (MSMEs) are finding it extremely difficult to cater to the domestic content requirement for the government programs like the Kisan Urja Suraksha Evam Utthaan Mahabhiyan (KUSUM) and Central Public Sector Undertaking (CPSU).

Given the solar component supply disruption due to the coronavirus (COVID-19) and the lack of sufficient solar cell manufacturing capacity in the country, this review investigation comes as another challenge to the industry.