The government is considering basic customs duty of around 20 per cent on solar energy equipment to provide an edge to domestic manufacturers and discourage imports, particularly from China. However, solar energy developers are of the view that basic customs duty (BCD) on solar equipment will be counterproductive for the segment in view of India's ambitious target of having 100 GW of solar energy by 2022.
  1. The government is actively considering about 20 per cent basic customs duty on solar equipment because safeguard duty (SGD) on these is applicable till July 29, 2020.
  2. At present, 15 per cent SGD is applicable on solar cells. This would be zero or nil from July 30, 2020.
  3. There is no BCD on solar equipment as of now. Once BCD is imposed, it would be applicable on imports from all countries.
  4. In July 2018, India had imposed SGD on solar cells imports from China and Malaysia for two years to protect domestic players from steep rise in the inbound shipments of the products.
  5. The government had imposed 25 percent SGD for the period July 30, 2018 to July 29, 2019, which gradually came down to 20 per cent for July 30, 2019 to January 29, 2020 and 15 per cent for January 30, 2020 to July 29, 2020.
  6. Since there will be zero duty on imports of solar equipment from July 30, 2020, there have been internal discussion in the ministries of new & renewable energy and finance.
  7. Shekhar Dutt, Director General, Solar Power Developers Association (SPDA) said,Proposal to impose BCD of 20 per cent on cells and modules is counterproductive to the growth of the overall solar power sector in the country.
  8. The SPDA supports an incentive scheme to develop India as solar manufacturing hub on a large scale to compete with best international products at competitive prices.
  9. Any tariff or non-tariff barriers at this stage is not conducive to meet the target which India has committed as a nation to the world and will make electricity costly for consumers.