Steep 40% Import Duty on Solar Cells

The government has decided to impose 40% basic customs duty (BCD) on solar modules and 25% on solar cells from 1 April 2022, in a move that would make imports costlier and encourage local manufacturing. The two items, which cu

BY Realty Plus
Published - Friday, 12 Mar, 2021

The government has decided to impose 40% basic customs duty (BCD) on solar modules and 25% on solar cells from 1 April 2022, in a move that would make imports costlier and encourage local manufacturing. The two items, which currently do not attract BCD, will come under it at the specified rates from 1 April 2022. There will be no grandfathering of power projects that are already bid out, considering the one-year period is sufficient to help developers secure the required raw materials in time. The customs duty will replace a 15% safeguard duty currently imposed on imports from China and Malaysia. The development follows the government announcing a production-linked incentive (PLI) scheme that offers manufacturers in 10 sectors, including those of high-efficiency solar modules, a total benefits of ?1.97 trillion. The plan has gained traction with 15 companies considering total investments of around $3 billion to build solar equipment manufacturing facilities here. “Presently, India’s solar sector, just like in any other country, is reliant on imports of solar equipment. The government has also noted instances of certain countries dumping solar cells and modules to kill the nascent domestic industry because of which the government had to impose safeguard duties," the notification said.