In a support to the domestic solar panel manufacturing industry, India may soon impose a Basic Customs Duty on imported solar modules and cells in the country. Reported in various media releases, the plans to levy a basic customs duty of 40% on solar modules and 25% on solar cells is underway as mentioned by power and renewable energy minister Mr Raj Kumar Singh.
The Backdrop of the Customs Duty
Over 80% of the solar modules used in solar projects in India are imported from countries like China and Malaysia. The imposition is therefore said to be a part of the Atmanirbhar Bharat or Self-Reliant India strategy which seeks to increase the dependence of the industry on domestically manufactured solar modules and cells. Currently, there is a safeguard duty of 15% which is levied on such imports. The basic customs duty once in effect will replace the safeguard duty. The duty is being said to be implemented from April of 2022.
MYSUN’s Take: How will the imposition of the duty impact you as a Power Consumer?
The Basic Customs Duty, even though being said to be implemented with the objective to build a sustainable solar manufacturing industry in the country, might not have a very favourable impact on the power consumers of the nation initially. The duty once in place will lead to a rise in price for both imported and the home manufactured solar modules which in turn will further increase the cost of solar systems for consumers across categories. Being still at an early stage of growth, the domestic module manufacturing industry might also struggle to keep up with the demands and quality, and thereby impact the progress of the ongoing solar projects negatively.
India is a growing economy which has the potential to meet the solar requirements of countries around the world. We hope any development or changes in the policies ahead leads to a harmonious growth of the industry and the consumers alike.