US safeguard duty to have nuanced implications for India

13 February 2018 |

On 22nd January this year, the US government imposed 30% safeguard duty on imported solar cells and modules. The duty has been imposed for four years but will reduce by 5% every year. First 2.5 GW of imports every year shall be exempted from duties.

As per WTO laws, imports from specified developing countries shall also be exempt from duties up to 3% of ‘total imports’ for individual countries and up to 9% of ‘total imports’ cumulatively for all such developing countries. This provision is a silver lining for Indian manufacturers as India is one of the exempted countries. Assuming that the US imports 10 GW cells and/or modules every year, Indian manufacturers can export up to 300 MW of modules per year with a healthy pricing advantage. This is an attractive opportunity but the small scale is not credible enough to support manufacturing in India.

One big unknown is the impact of this decision on US module demand and ultimately, the international prices. The level of duty imposed is less than the US International Trade Commission (US ITC) recommendation and final solar system prices are expected to go up by only between 6-10%. That makes us believe that final impact on US demand and module prices elsewhere would be minimal.

The US decision could still have one important implication for India. India is in the midst of its own trade investigations to consider safeguard and/or anti-dumping duty on cells and modules. We feel that the Indian government has a much tougher call as the downstream market is extremely price sensitive and any price shock would detract from the vastly ambitious target of 100 GW by 2022. Nonetheless, the US decision would ring loudly in the ears of Indian policy makers, who may take a cue from the US in imposing duties of about 20-30%.


Recent reports

Renewable Energy Certificates   

The Renewable Energy Certificate (REC) scheme has been plagued by lax Renewable Purchase Obligation (RPO) compliance, frequent changes in regulations ...

Buy Report Download Executive Summary

India Corporate Renewable Brief | Q3 2021   

Our latest edition of quarterly report provides a detailed regular update on key trends and developments in the C&I renewable market....

Buy Report Download Executive Summary

India Solar Compass Q3 2021   

This report provides a detailed update of all key sector developments and trends in the quarter – capacity addition, leading players, tender and pol...

Buy Report Download Executive Summary

India Residential Rooftop Solar Market   

This comprehensive report covers India's residential rooftop market – growth drivers, challenges, policy and regulatory framework, market segmentati...

Buy Report Download Executive Summary

Opportunities for Indian companies – Bangladesh, Sri Lanka and Nepal   

Bangladesh and Sri Lanka together plan to add 8 GW renewable power capacity by 2030. Nepal aims to increase share of renewable power in its energy mix...

Buy Report Download Executive Summary

India Solar Rooftop Map | June 2021

India Solar Rooftop Map is an info-graphic report providing a snapshot of rooftop solar market in India – capacity addition across states and consum...

Download
Award winnig research
We use cookies to offer you an optimal user experience and collect information on website usage.