Government to propose new custom duties on solar imports

The Union Minster for Power and New and Renewable Energyhas said that a 20-25 per cent basic customs duty is set to be imposed on solar module imports for the first year as soon as the current safeguard duty expires on July 31, 2020. The minister has also stated that the duty for solar cells will be 15 per cent for the first year. The duty on the import of solar module and cells is proposed to be progressively increased to 40 per cent. The basic customs duty has been proposed to curb imports of solar panels.

India imports a bulk of its solar cells from China even after the imposition of a 25 per cent safeguard dutyon import of solar cells from China, Malaysia and a few more countries in July 2018. It then decreased to 20 per cent between July 2019 and January 2020, further decreasing to 15 per cent for the period from January-end 2020 to July-end 2020. This move comes amid Covid-19 pandemic which led to the disruption of solar equipment supply to India and rest of the world as Chinese manufacturing facilities were temporarily shut down. The supply chain restrictions meant a delay in commissioning of a large number of solar assets in India. The move is expected to promote domestic manufacturing in India.Moreover, the ongoing border conflict with China at the Galwan valley seems to have reaffirmed the government’s decision to go ahead with the customs duty on the solar imports.