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Steep duty on solar equipment from April 2022
Mint earlier reported India’s plans to impose new tariffs on imports of solar cells and modules from April 1 2022, citing Union minister Raj K Singh.
he government has decided to impose 40% basic customs duty (BCD) on solar modules and 25% on solar cells from April 1 2022, in a move that would make imports costlier and encourage local manufacturing.
According to a March 9 notification from the ministry of new and renewable energy, the idea is to emerge as a leading global supplier of these items, besides meeting India’s requirements locally. The two items, which currently do not attract BCD, will come under it at the specified rates from April 1, 2022. There will be no grandfathering of power projects that are already bid out, considering the one-year period is sufficient to help developers secure the required raw materials in time.
Mint earlier reported India’s plans to impose new tariffs on imports of solar cells and modules from April 1 2022, citing Union minister Raj K Singh.
“The ministry of finance has also advised that the customs notification in this regard shall be issued at the appropriate time,” the notification said.
The customs duty will replace a 15% safeguard duty currently imposed on imports from China and Malaysia. The development follows the government announcing a production-linked incentive (PLI) scheme that offers manufacturers in 10 sectors, including those of high-efficiency solar modules, a total benefits of ₹1.97 lakh crore. The plan has gained traction with 15 companies, considering total investments of around $3 billion to build solar equipment manufacturing facilities here, as reported by Mint earlier.
“Presently, India’s solar sector, just like in any other country, is reliant on imports of solar equipment. The government has also noted instances of certain countries dumping solar cells and modules to kill the nascent domestic industry, because of which the government had to impose safeguard duties,” the notification said.
The market for solar components is dominated by Chinese firms. India imported $2.16 billion worth of solar photovoltaic (PV) cells, panels and modules in 2018-19. A surge in imports prompted the Centre to impose a safeguard duty from July 30 2018 on solar cells and modules imported from China and Malaysia. The safeguard duty, which was set to expire on July 29, has been extended by a year.
“Covid brought disruptions in international trade, including imports of solar modules and solar cells, affecting solar capacity additions. Considering India’s huge solar targets and that electricity is a strategic sector of the economy, India needs to develop domestic solar manufacturing capacities and reduce its dependence on imports,” the notification added
