The renewable energy industry is hoping that the upcoming Union budget will provide clarity on implementation of the long-pending basic customs duty on solar cells and modules, which they said would fast-track investments in the sector.
“We look forward to clarity on schemes that would attract investment towards capacity creation in the solar PV supply chain in India,” said Sujoy Ghosh, vice president – APAC & India Region at First Solar, a leading US solar panel manufacturer that has been considering setting up a production unit in India.
Finance minister Nirmala Sitharaman had announced a 20% basic customs duty on solar cells and modules in the 2019-20 Union budget, but it has not come into effect yet. Last year, power minister R.K. Singh had said the duty would soon come into effect, but the industry is still waiting for it.
At present, around 85-90% of cells and modules used in Indian solar projects are imported, mostly from China, as Indian manufacturers are unable to compete with their Chinese counterparts on price.
The basic customs duty, if and when it is imposed, is expected to help local manufacturing compete better.
Several domestic and international companies have committed to setting up around 40 GW of solar capacity as per news reports on the back of the government’s ‘Atmanirbhar Bharat’ initiative to boost domestic manufacturing. Many of them are waiting for tariff barriers on imports before going ahead with their investments.