Rising duty structure of upto 40% proposed on solar gear imports

New Delhi: The government has proposed to end customs duty exemption for solar cells and module imports as it looks to boost domestic manufacturing and check large scale procurement of solar generation equipment from China.

Power and renewable energy minister R.K. Singh said on Thursday that the ministry has proposed 20-25 per cent basic customs duty on solar module imports for the current year that will go up to 40 per cent in the next year.

Also, the duty on solar cells has been proposed at a lower 15 per cent level for the first year and a higher 30-40 per cent level in the next year.

The duty has been suggested to be made applicable after the existing 15 per cent safeguard duty in solar cells and modules expires end of July.

Power ministry sources said that the finance ministry is likely to take a decision on the duty structure on solar gear soon.

The proposal on duty is part of a larger measure being looked at by the government through imposition of tariff and non-tariff barriers on imports of non-essential items from China.

While the government had earlier put some restrictions on investment from neighbouring countries including China, the added dimension of confrontation between the armies of the two countries has fast tracked the proposals.

Checks on solar equipment are being considered as Chinese firms supply about 80 per cent of solar cells and modules to India. India imported solar equipment worth $2,817.34 million, $3,418.96 million, and $1,694.04 million, in FY17, FY18 and FY19 respectively from China. In the first nine months of FY20, imports from China stood at $1,179.89 million. Imports have fallen drastically since April due to the COVID-19 outbreak and shutdown of operations in China. (IANS)

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