New Delhi, July 17 (KNN) India has recommended imposing a 25% safeguard duty on solar cells from China and Malaysia in order fearing “serious injury” to domestic manufacturers.

The Directorate General of Trade Remedies (DGTR) has proposed to put the safeguard duty for a period of two years.

The tariff would be lowered to 20 percent for the first half of the second year and to 15 percent by the second half. After the Finance Ministry approves the recommendations, the duty will be come into effect.

“Imposition of safeguard duty in this case would be in public interest because it will prevent complete erosion of manufacturing base of solar industry in the country,” the DGTR said in the recommendation.

The imposition of duty would be notified by the Department of Revenue, Ministry of Finance. The DGTR has not notified duty on the three solar cells and module manufacturers in the special economic zone (SEZ) area – Adani Green Energy, Vikram Solar, and Websol Energy.

The notification said the issue of levy of SGD on sales/clearances by SEZ units falls under section 30 of the SEZ Act and Section 8B of the Custom Tariff Act, 1975, and hence “required to be dealt by the relevant competent authorities and outside the purview of this investigation.”

India is the largest importer of Chinese solar equipment.

The Indian Solar Manufacturers Association (ISMA) had filed an application in June last year with the government claiming imported solar cells have flooded the market, causing injury to the domestic industry. The association urged for a SGD for a level playing field.

The Directorate General of Safeguards (DGS) after investigations had suggested a duty of 70 per cent on the imports coming from China. Later, the DGS was merged with other trade remedial bodies under the umbrella organisation DGTR in May.

DGTR has held a hearing of all stakeholders in the matter, including ISMA, Indian power project developers and their association, exporting countries – China, Taiwan, Europe, the US, and their respective trade associations and government official.

In its final recommendation, the DGTR observed that the position of domestic industry “further deteriorated on account of continued low price of import of product under consideration (solar cells and modules) which continued price injury to the domestic industry, thereby establishing the threat of injury as well.”