Home >Industry >Energy >Govt plans to levy duty on solar cell components to curb China imports

India plans to impose a basic customs duty (BCD) on wafers and ingots that go into the manufacturing of solar cells and modules, said power and new and renewable energy minister Raj Kumar Singh on Friday.

This will make their import from China expensive and comes in the backdrop of all imported solar cells, modules and inverters set to attract a basic customs duty starting on 1 August.

The BCD follows the 29 July expiry of safeguard duties on solar cells and modules imported from China and Malaysia.

The move is a reflection of India’s economic strategy to impose more tariff barriers to check imports from China, and comes against the backdrop of mounting tensions along the India-China border.

Speaking at the BloombergNEF (BNEF) summit on Friday, Singh said that a year after BCD on solar cells, modules and inverters are levied, the National Democratic Alliance (NDA) government plans to impose BCD on wafers and ingots.

This assumes importance given the rapid pace of clean energy capacity addition by India. Clean energy projects now account for more than a fifth of India’s installed power-generation capacity.

India has 34.6GW of solar power, with an aim to have 100GW of solar capacity by 2022.

The country is seeking additional clean energy investment of around $80 billion till 2022, growing more than threefold to $250 billion during 2023-30.

To promote its Make in India push, the government is also looking to provide viability gap funding (VGF) to manufacturers.

“The (VGF) proposal is doing the rounds," Singh said and added that China has been giving huge indirect subsidies to companies that are dumping their products in India.

Along with leveraging its growing power sector market to prepare an economic response against China, India also wants to play a larger role in the global supply chains amid the disruption caused by the coronavirus.

India plans to leverage its growing power sector market in its playbook against China. The strategy adopted as part of a wider decoupling exercise involves nudging Indian firms to explore ways of getting out of contracts inked with Chinese firms. And, analysts link the border dispute with tougher Indian actions.

“These include cancellations of ongoing construction contracts by Chinese companies, awarding closed bids to Indian companies over Chinese, making ‘country of origin’ declarations compulsory in government e-procurement; proposal to raise tariff/non-tariff barriers on 1,100+ cheaper imports from China," Jefferies Equity Research wrote in a 24 June report.

Singh said the first step was imposing basic customs duty on imports of solar cells and modules, and added that the idea was to attract companies to manufacture in India.

Subscribe to newsletters
* Enter a valid email
* Thank you for subscribing to our newsletter.

Click here to read the Mint ePaperLivemint.com is now on Telegram. Join Livemint channel in your Telegram and stay updated

My Reads Logout