India Likely to Hike Import Duty on Solar Equipment in the Coming Years

R.K. Singh also announced that a storage policy would be unveiled soon which would provide tax incentives for solar equipment manufacturing in the country


The Minister for Power R. K. Singh has announced that the import duty that’s currently being levied on solar equipment will be raised in the coming years.

According to a Press Trust of India (PTI) report, “India will increase the import duty on solar equipment to encourage domestic industry in the coming years,” Singh said. He also announced that a storage policy would be unveiled soon which would provide tax incentives, especially for solar equipment manufacturing in India.”

“Right now, safeguard duty is imposed on solar equipment, which will be diluted in a few years. We will increase the tariff on solar equipment down the value chain in the coming years,” the PTI report quoted him as saying.

Singh assured that the rise in import duty would not impact solar energy bidding process in India.

“The Power Minister has stated that there will be a hike in import duty on solar power equipment to boost domestic production. This will impact upcoming bids for the NTPC and SECI tenders as solar IPPs (independent power producers) are likely to factor in such an increase unless ‘Change in Law’ provisions allow a delta claim,” commented Dipti Lavya Swain, Partner, HSA Advocates.

Recently, the Directorate General of Trade Remedies (DGTR) issued its preliminary findings in the anti-dumping investigation on the imports of aluminum and zinc-coated flat products originating in or exported from China PR, Vietnam, and Korea RP. It has imposed a provisional duty on the import of these products that are used in solar mounting structures.

Mercom recently reported that lately, aggressive bidding had taken a toll on the mounting structures as the quality is being sacrificed to cut costs, which could have a negative consequence on hundreds of solar projects that are supposed to last 25 years in any weather.

For the past few months, an anti-dumping duty has been levied on the import of solar glass and EVA sheets. Last year, the DGTR had recommended a 25% safeguard duty on solar cell imports from China and Malaysia for the first year, followed by a phased-down approach. In the first six months of the second year, a safeguard duty of 20% will be payable by exporters to India, and in the latter half of the second year, exporters will pay a safeguard duty of 15%. The safeguard duty of 25% on solar modules and cells has been in effect since July 30, 2018.

“At the end of the day duties will be passed on to the consumer as tariffs will go up if duties are imposed. We have already seen that after safeguard duty,” said Raj Prabhu, CEO of Mercom Capital Group.


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