New Delhi: India plans to impose basic customs duty ( 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 imports of such wafers and ingots from China expensive and comes in the backdrop of all imported solar cells, modules and inverters to attract a basic customs duty starting 1 August. This levying of BCD follows after the safeguard duty on solar cells and modules imported from China and Malaysia, currently in place, expires on 29 July.
The move is a reflection of India’s economic stratagem to impose more tariff barriers to check imports from China and comes in the backdrop of tensions spiking along the India-China border.
Speaking at a conference on Friday, Singh 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 that 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 34.6 GW of solar power, with an aim to have 100 GW 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 grant funding (VGF), a grant and is at the centre of India’s infrastructure-creation plans through public private partnerships (PPPs).
“The (VGF) proposal is doing the rounds," Singh said and added China has been giving huge indirect subsidies to its companies and they are dumping their products in India.
Along with leveraging its growing power sector market to ready an economic response against China, India also wants to play a larger role in global supply chains in the backdrop of the disruption caused by the coronavirus that originated in Wuhan, China.
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, Mint reported on Thursday.
Analysts say that the border dispute flared up between the two neighbours has resulted in tougher actions.
“These include cancellations of ongoing construction contracts by Chinese cos, awarding closed bids to Indian cos 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 that 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 come manufacture in India.
Project developers say that the imposition of BCD on solar cells, modules and inverters may result in a 20 paise increase in solar tariffs for new contracts.
Singh said that every nation has to answer that question, with the need for a call to be taken about what is more important jobs or an increase in price by a cent or 2 cents?
India’s strategy is of erecting tariff barriers and other obstacles, including subsidizing finance for promoting local power equipment makers and prior-permission requirements for imports from countries with which it has a conflict.
Singh said that India is not blind, deaf or dumb and will fight it.