In a new development, the Malaysian delegation at the World Trade Organization (WTO) has requested for consultations with India on the recent imposition of 25 percent safeguard duty on solar imports from China and Malaysia.

The objective is to exchange views and seek clarification regarding the proposed measures and reaching an understanding on ways to achieve the objectives set out in Article 8.1 of the WTO Agreement on Safeguards.

Malaysia seeks to hold consultations as soon as possible with the participation of representatives from India investigating authorities. Malaysia looks forward to receiving India’s response to this request.

According to a Geneva-based trade official, “Malaysia is asking for talks with India on possible compensation for the safeguard measure.”

This is not the first time that India’s safeguard duty has been a topic of discussion at the trade body.

Previously, at a WTO safeguard committee meeting, the European Union and Japan had criticized the conduct of the safeguard duty investigation and the initial findings. India’s actions will create serious domestic shortages and even risk the environment, the committee opined. The European Union said it trusts India will refrain from imposing any definitive measure while Japan said an investigation should include reasonable public notice and other appropriate means to ensure interested parties can present evidence.

However, it is important to note here that shortly after the imposition of duty, the Ministry of Finance announced that the government will, for the time being, not insist on the payment of safeguard duty on solar imports.

The ministry has clarified that imported solar cells and modules will be assessed provisionally on furnishing a simple letter of undertaking or bond.

Similar Cases

Recently, the United States accepted China’s request to enter consultations with regards to U.S. safeguard measures on imported solar photovoltaic products and domestic subsidies.

On August 14, 2018, China had made the request and the U.S. granted it on August 24, 2018. Regarding this case, the Geneva-based trade official wrote, “China only recently requested consultations, so the two sides still have time to sit down and discuss (minimum 60-day consultation period). It will only be from mid-October that China may, if the talks fail and it chooses to do so, ask for a WTO panel to rule on its claims.”

“You may have seen however that Korea asked for a dispute panel on the U.S. solar cells safeguard at a meeting of the WTO’s Dispute Settlement Body on Monday; this is essentially the same complaint lodged by China. The U.S. blocked Korea’s request, but Korea can submit a second request for a panel at the next DSB meeting on September 26, 2018,” added the trade official.

In the case of the Indian delegation at WTO, it can either block or accept Malaysia’s request. The consultations will follow the same timeline as the U.S.-China consultations.