Japan has asked India to immediately review its safeguard duties on solar cell imports to ensure that products that have different characteristics from solar cells are excluded from the levy.
The request was made at a meeting of the World Trade Organization (WTO) committee on safeguards earlier this week, a Geneva-based official told BusinessLine . “India said it would like to discuss the issue bilaterally with Japan,” the official said.
In July last year, India imposed a 25 per cent safeguard duty on imports of solar cells and modules from China and Malaysia for the first year. The duty is to be scaled down to 20 per cent on such imports for the first six months of the second year and 15 per cent for the remaining half of the year.
Safeguard duties are import levies, over and above the existing duties, that are imposed to check a sharp increase in imports of certain items in case it caused disruption in the domestic market.
The report clarified that since imports of the solar products from other countries, like Singapore and Taiwan, “do not exceed 3 per cent individually and 9 per cent collectively”, they won't attract the safeguard duty.
Although the decision does not directly affect Japan as exports from the country are not subject to the safeguard duty, it has a bearing on Japanese conglomerate Panasonic’s venture in Malaysia — PECMY.
Unique tech
PECMY, in its submission to the Directorate-General of Trade Remedies in India, had said that products exported by the company were different from the solar cells and modules that were causing injury to Indian manufacturers. It further explained that Silicon Heterojunction (SHJ) was a unique technology and was under a patent to Panasonic Corporation, Japan until 2016 and the solar modules manufactured using SHJ technology were different than regular solar modules.
“The discussions on product differentiation are highly technical. India has therefore asked for a bilateral discussion on the matter,” another official said.
India’s move to impose safeguard duty on solar cell and module imports was criticised by Japan last year which said that an investigation should include reasonable public notice and other appropriate means to ensure interested parties can present evidence.
The safeguard duty on solar cells and modules were imposed after investigations were carried out by the DG Safeguards on receiving complaints from local solar manufacturers that growing imports of solar equipment were posing a serious threat to domestic players.
There was a 37 per cent decline in import of solar modules and cells in India in 2018 to $2.59 billion, compared to $4.12 billion the previous year.