Govt should exempt solar units under SEZ from safeguard duty

Govt should exempt solar units under SEZ from safeguard duty

In 1995, India became a member of the World Trade Organization (WTO) incurring obligations to provide market access to goods from other countries. The initial phase of trade liberalisation led to a sudden increase of imports in countries which lacked competitive manufacturing facilities. However, gradually many countries developed indigenous manufacturing capacities and global trade achieved partial equilibrium.

Having said that, it is an economic reality that exports of goods into the markets of some countries cause “injury” to the domestic producers of importing countries. The WTO framework provides for various remedies such as anti-dumping and safeguard measures to tackle such situations.

In 2005, India created Special Economic Zones (SEZs) to facilitate manufacturing in India at competitive prices. SEZs were provided benefits such as single window clearance and tax holidays.

SEZ units are considered to be outside Indian customs territories and goods manufactured in these units, if sold in India (DTA), attract import duties including anti-dumping and safeguard duty, as applicable on goods imported into India from other countries. Read More

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