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India’s new solar safeguard duty may threaten PM Modi’s ambitious renewable energy plans

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The development follows a decision earlier this week by India’s Supreme Court that overturned a lower court stay on the tariff.

New Delhi: India’s finance ministry said a 25 percent safeguard duty on solar cells and modules imported from China and Malaysia has been imposed, providing some clarity on the protectionist move that had been caught up in court battles.

The tariff will be imposed in accordance with a notification originally published July 30, the finance ministry said in a document posted on its website Thursday. The development follows a decision earlier this week by India’s Supreme Court that overturned a lower court stay on the tariff.

The safeguard duty may threaten Prime Minister Narendra Modi’s ambitious plan of installing 175 gigawatts of renewable capacity by 2022. While cheap imports helped efforts to reach that goal, domestic solar power equipment companies complained they were being undercut. Meanwhile, the country’s efforts to expand its own manufacturing capacity has been downsized and delayed.

India’s Directorate General of Trade Remedies had originally issued a recommendation on July 16 to impose a two-year safeguard duty on solar equipment, saying the overseas supplies caused or threatened “serious injury” to domestic manufacturers.– Bloomberg

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