India to levy import tax on solar modules, cells from April 2022

India will levy a customs duty of 40% on solar modules and 25% on solar cells from April 2022, according to a government document and two industry sources familiar with the matter, as it looks to cut imports and boost local manufacturing.

India wants to ramp up its renewable capacity to 175 gigawatts by 2022 and 450 GW by 2030, from about 93 GW currently, as part of its commitment under the Paris climate accords.

“Proposal of Ministry of New and Renewable Energy (MNRE) to impose Basic Customs Duty on solar cells and modules (without grandfathering of bid out projects) has been agreed to by the Ministry of Finance,” the MNRE said in a memo dated March 9.

India does not currently levy a customs duty on imports of solar cells and modules, but has a safeguard duty to protect its local industry which expires in July.

The government spokespeople did not respond to calls beyond usual business hours.

The energy-hungry nation imports most of its solar cells and modules from China, in a bid to meet Prime Minister Narendra Modi’s target of installing 100 gigawatts of solar energy by 2022. Tensions between India and neighbouring China have been high in the recent past.

India is targeting ramping up its solar capacity to 280 GW by 2030-31 from about 39 GW currently, making it over a third of its overall power requirement, according to the memo.