India outlines 20% customs duty on solar modules, cells and inverters from August 2020

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Image: Flickr/Sanyam Bahga.

India is set to impose a 20% levy on imported solar modules, cells and inverters from August, replacing the current safeguard duty.

Numerous local reports state the levy was proposed by Indian power minister RK Singh yesterday during a call with industry representatives, confirming that Prime Minister Narendra Modi’s government intended to impose a Basic Custom Duty (BCD) of 20% on imports.

That BCD, which comes as part of the ‘Make in India’ initiative designed at stimulating domestic manufacturing, would replace the existing safeguard duty of 15% set to expire on 29 July 2020.

The update serves as confirmation of duties first teased within the Union budget earlier this year, which at the time set no particular timeframe for the introduction of such levies. It would also seem to remove any confusion over potential exemptions for components or equipment, as were suggested a month later.  

It also comes amidst a push from India’s Ministry of New and Renewable Energy to rekindle domestic renewable manufacturing having witnessed imports struggle with logistics issues posed by the ongoing COVID-19 pandemic. In May the government said that it had designated solar PV manufacturing, as well as advanced battery manufacture as 'Champion Sectors' of national self-reliance and would be supporting both with incentives.

In addition, RK Singh also confirmed that an approved list of PV manufacturers for use in government-backed solar projects would be published in October this year, having been pushed back from the original date of April following the onset of the pandemic.

While expected, the news will come as blow to Chinese inverter manufacturers which have come to dominate India’s rooftop solar inverter market, as research compiled by JMK Research & Analytics showed earlier this year.

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