To incentivise domestic manufacturing of solar modules and cells, the government is planning to introduce a basic customs duty (BCD) on import of equipment for the sector. The idea is to start with a small duty and gradually raise it to 20%, so that local solar power developers, who rely a lot on imports from China, don’t take a big hit in the short term.
The BCD introduction will be concurrent with the removal of the current safeguard duties on import of solar equipment from China and Malaysia in July this year. Anand Kumar, secretary, ministry of new and renewable energy (MNRE), told FE: “What we are contemplating is that the basic customs duty will be the right way to regulate the solar-sector (imports) on a long-term basis, since the safeguard duty is only a temporary measure.” Kumar added that his ministry was discussing with the ministry of finance how the BCD could be introduced in a gradual manner, “maybe 1-2% to start with” and then increase it up to 20% over a period of time.
