The government proposes to bring in 20-25 per cent basic customs duty (BCD) on imported modules, increasing it to 40 per cent next year; for cells it will be 15 per cent in the first year, and 30 per cent next year.
However, Indian manufacturers of solar modules and cells are not satisfied with the proposed basic customs duty. They have demanded more protection, funding for technological upgradation, capital subsidy for setting up manufacturing units and concessional interest rates.
Waaree, a solar module manufacturer, feels that the basic customs duty on imported modules should be at least 50 per cent as Chinese modules sell today at 18 US cents a Watt-peak so 25 per cent duty would translate to only 4.5 cents.
Waaree also pointed out that seven years ago, the government had proposed a 70 per cent safeguard duty on modules imported from China and a few other countries.
Later, the government brought down the safeguard duty to 25 per cent for the first year, 20 and 15 per cent for the subsequent two half-years — which will come to an end on July 31.
Adding to the above Adani Solar stated that once India had more than 100 per cent customs duty on imported cars because of which many car manufacturers set up plants in the country same should be now invoked for renewable energy sector.
Adani Solar added further that the industry also needed 25 per cent capital subsidy, which the government was giving (under the M-SIPS scheme). However, since solar module technology “keeps changing every two or three years”, the industry should be given “some sort of a technology upgradation fund”.
Furthermore, solar manufacturers want interest subvention, or concessional rate of interest, because there is a huge difference between interest rates in China and India.
China is the biggest supplier of cells and modules to India. In the last four years, India imported modules and cells worth ₹72,800 crore from China.
However, the data from the Commerce Ministry show that India’s exports of solar cells and modules nearly doubled to ₹1,506 crore, compared with ₹847 crore in the previous year.
Reference- JMK Research and Analytics Webinar, The Hindu BusinessLine, Economic Times