India considers new solar manufacturing zones as basic custom duty plan progresses – reports

Share on facebook
Share on twitter
Share on linkedin
Share on reddit
Share on email
Image: Flickr/Sanyam Bahga.

India is looking to set up a range of new production zones to manufacture solar equipment, according to local sites.

New and Renewable Energy minister Raj Kumar Singh told India's Business Today that up to seven sites are being considered near major ports, in a move to lower logistics costs. Furthermore, land was said to be more readily available in these areas. 

India is currently attempting to stimulate its domestic solar manufacturing base, balanced against a further target of reaching 100GW of installed solar by 2022. The country is estimated to import 80% of the components used in solar developments from China.

To protect domestic manufacturing, India’s Ministry of New and Renewable Energy also once again pitched a basic customs duty on solar modules, cells and inverters be levied at 15-20%, having originally unveiled the proposed policy earlier this summer. This would be introduced on top of a safeguard duty, which has been extended on solar equipment for another year.

“Safeguard duty is temporary,” Singh told Business Today. “We said that we would prefer customs, which is [a] permanent feature.”

A safeguard duty of 14.9% will be in place until 28 January 2021, when it will reduce to 14.5% until 29 July 2021. The duty is levied on all solar cells and modules imported from China, Thailand and Vietnam.

However, consultancy Fitch Solutions has warned that a double taxation of solar via both safeguard and basic custom duties may significantly increase project costs, alter the trajectory for solar tariff rates in India and jeopardise project pipelines. The result could be a large number of project cancellations, with tariff rates becoming too low to cover project costs, rendering them financially unviable.

Hit by disruptions caused by COVID-19, India installed just 205MW of solar capacity in the second quarter of 2020, down 86% year-on-year, according to a report published last week from Mercom India Research. The consulting firm is forecasting approximately 4GW of solar to be added in 2020.

Read Next

November 24, 2021
The US International Trade Commission has recommended that the Section 201 safeguard tariffs on solar cells and modules be extended.
November 24, 2021
Tata Group is planning to set up a 4GW solar cell manufacturing unit in the Indian state of Tamil Nadu, according to a report from the Times of India.
November 19, 2021
JA Solar has revealed plans to build a 5GW module assembly plant in Chaoyang City, Liaoning Province.
PV Tech Premium
November 17, 2021
Following the US Customs and Border Protection's updated guidance on its WRO on silicon metal products, PV Tech Premium speaks to legal experts on what’s changed for solar imports.
November 17, 2021
China has revealed its initial subsidy limits for existing renewables projects in 2022, however it remains to be seen whether the funding is to be topped up.
November 17, 2021
Prices for solar modules in the US are expected to normalise following last week’s rejection of a petition surrounding alleged anti-circumvention of anti-dumping and countervailing duties (AD/CVD).

Subscribe to Newsletter

Upcoming Events

Solar Media Events
December 1, 2021
Solar Media Events
February 1, 2022
London, UK
Solar Media Events
February 23, 2022
London, UK
Solar Media Events
March 23, 2022
Austin, Texas, USA
Solar Media Events
March 29, 2022
Lisbon, Portugal

Cyber Monday Flash Sale – 50% off our subscriptions

24 hours only