Govt plans new import tax on solar equipments starting August

India’s renewable energy ministry has proposed imposing customs duty on some solar power equipment starting Aug. 1 as part of the country’s goal of becoming self-sufficient, the Press Information Bureau said in a statement.

The ministry has proposed taxing imports of solar cells, modules and inverters starting August, the statement said, citing power minister Raj Kumar Singh’s interaction with the industry. The decision comes amid recent border skirmishes with China, which accounts for nearly 80% of module supplies in the country.

Indian Prime Minister Narendra Modi gave a call for self-reliance, echoing a global sentiment to diversify supply chains in the post-pandemic world. Recent border tensions with China have made that campaign more urgent.

A clear trajectory of customs tax will be declared in due course, the statement said, without giving further details. India currently levies safeguard duty on imports of solar cells and modules from China and Malaysia. That tax expires at the end of July.

Singh asked the industry to consider stopping imports of products whose domestic supplies are adequate and added that developers using domestic equipment will get cheaper loans from lenders Power Finance Corp. and REC Ltd., according to the statement.