Govt plans to impose 20% customs duty on solar power equipment to cut imports

The government is considering a proposal by the Ministry of New and Renewable Energy (MNRE) to impose 20 per cent basic customs duty on solar modules to provide an edge to domestic manufacturers and discourage imports, particularly from China, Minister of State for Finance Anurag Thakur said on Thursday. While the government has taken a number of steps to increase capacities in the renewable energy sector in the last few years, it is now time to cut down reliance on imports of solar equipment and components, especially from China, the minister said.

Currently, Chinese firms supply about 80 per cent of solar cells and modules in the Indian market.

“We are also planning to impose, as the MNRE suggested and they have been taking up with us (Finance Ministry), 20 per cent basic customs duty on the solar modules to discourage import from other countries,” he said while addressing a webinar organized by CII.

India imported solar power equipment worth USD 1.2 billion during April-December 2019, he said.

Thakur further said the government is in discussions with various stakeholders and most of the policies in the coming times will be long-term, aimed at making India self-reliant.

Speaking about the emphasis of the Narendra Modi-led government on green energy, he said, “The focus on renewable energy shows our ambition, intent and commitment to the world to shift towards a green future. India no longer talks about mega watts, we are taking giant strides towards giga watts capacity building to power our industries and cities of the future.”

The government has set up a green energy corridor with an estimated investment of USD 5.8 billion to ensure evacuation of renewable energy from generation points to the load centres by creating transmission infrastructure.

Besides, he said, MNRE has announced a provision for bank loans up to a limit of USD 2.3 million to borrowers to set up solar-based power generators, bio-mass based power generators, wind power systems and micro hydel plants.

“A new hydropower policy for 2018-28 was drafted for the growth of hydro projects in the country. We have also announced plans to implement a USD 238 million National Mission on advanced ultra-supercritical technologies for cleaner coal utilisation.

“MNRE has decided to provide custom and excise duty benefits to the solar rooftop sector, which will lower the cost of setting up as well as generate power, thus boosting growth,” Thakur said.

For setting up hubs for manufacturing renewable energy equipment to meet domestic demand and reduce the imports of solar cells and other components, MNRE had written to all the states in April to identify land parcels of 50 to 500 acres, he said.

“We have set ourselves a very ambitious target of achieving a capacity of 175 GW by 2022, but we must aim big to achieve big…the seeds of the green energy quantum leap have been sown by the Modi government, the renewable energy sector must take the lead so that India emerges as a torchbearer for the world in this sector,” he said.