India is set to impose a customs duty of 40 percent on solar modules and 25 percent on solar cells from April 2022, as per a government document, as it looks to cut imports and enhanced local manufacturing.
India aims to ramp up its renewable capacity to 175 GW by 2022 and 450 GW by 2030, from about 93 GW currently, as part of its commitment under the Paris climate agreement.
"Proposal of Ministry of New and Renewable Energy (MNRE) to impose Basic Customs Duty on solar cells and modules (without grandfathering of the bid out projects) has been agreed to by the Ministry of Finance," the MNRE said in a memo dated March 9.
The ministry specified the following on imposing a duty on solar imports “At present, India’s solar sector, just like in any other country of the world, is comprehensively dependent on imports of solar equipment. The government has also noted cases of certain countries dumping solar cells and modules to kill the promising domestic industry, because of which the Government had to impose safeguard duties.
“COVID-19 pandemic brought disruptions in international trade including imports of solar modules and solar cells affecting solar capacity additions in the country. Bearing in mind 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 to avoid disruption in future.”
The ministry also accentuated that the central government’s Atmanirbhar Bharat initiative has been planned to gear up the country towards scaling up domestic manufacturing. And thus, scaling up domestic solar manufacturing would also facilitate India to export solar cells/modules. This would also provide other countries an alternative avenue for procuring solar cells/modules.
India aims to ramp up its renewable capacity to 175 GW by 2022 and 450 GW by 2030, from about 93 GW currently, as part of its commitment under the Paris climate agreement.