PETALING JAYA: Malaysia’s solar industry will be hit by another blow after India became the second country after the United States to impose safeguard duties on solar panel imports.
Already facing a 30% tariff imposed by the US, solar panel exporters from Malaysia will now face a 25% import duty on shipments to India.
Yesterday, India’s Directorate General of Trade Remedies announced that it had recommended the imposition of a 25% safeguard duty on solar cell imports from Malaysia as well as China for a one-year period, as the imports have threatened to cause serious injury to the domestic producers of the equipment.
According to the recommendation, after the first year, the duty will be lowered to 20% in the first six months of the second year and 15% for rest of the year.
Malaysia is the second-largest supplier of solar modules and cells to India after China, while Taiwan is the third-largest exporter of the technology.
Last year, Malaysia accounted for 5.9% of solar panel imports by India, compared with China’s 88.2% and Taiwan’s 2.2%.
In total, India imported US$4.12bil (RM16.66bil) worth of solar modules and cells last year, up 43% from US$2.88bil in 2016.
Globally, Malaysia’s photovoltaic cells and module production industry is the third largest after China and Taiwan, accounting for 8% of the global output.
According to the Malaysian Investment Development Authority, the country’s solar manufacturing companies’ total exports were worth nearly RM11.1bil in 2016. Up until 2015, 48 solar projects had been implemented with total investments of RM28bil, creating more than 26,700 job opportunities.
The Indian government said the recommendation to impose safeguard duties on solar panel imports was due to increased imports of solar cells, assembled in modules. It added that it was in the public interest to impose safeguard duties on imports to protect the domestic industry.
According to the statement posted by India’s Directorate General of Trade Remedies on its website, the request was made by the domestic industry for the imposition of a provisional safeguard duty by the Indian Solar Manufacturers Association on behalf of five Indian producers – Mundra Solar PV Ltd, Indosolar Ltd, Jupiter Solar Power Ltd, Websol Energy Systems Ltd and Helios Photo Voltaic Ltd.
The five companies had sought for the imposition of a safeguard duty on imports of “solar cells whether or not assembled in modules or panels” (product under consideration or PUC) into India.
Upon examining the request, it found there existed critical circumstances which warranted the imposition of a provisional safeguard duty to provide interim relief to the domestic industry from suffering irreparable damage, which could have been difficult to repair.
While China’s exports to India constituted a paltry 1.52% of its total global exports during 2012, this increased to 29.8% during 2017.
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