India considers delaying customs duties on solar imports

Industry News | | MIC Customs Solutions |

A 40 per cent levy on solar panels entering India may have to be delayed.


The Indian government is considering delaying the application of customs duties on solar panel imports after a host of supply problems from other countries.

Minister of power Raj Kumar Singh told the Economic Times there may be no option but to change the nation's original plans after uncertainty in China.

In March 2021, India announced that it would be introducing a 40 per cent basic customs duty on solar modules entering the country as of April 2022, as well as a 20 per cent duty on solar cells.

This would replace the 15 per cent safeguard duty currently imposed on imports from China and Malaysia and was aimed at reducing reliance on imports to boost domestic manufacturing of photovoltaic products.

Indeed, the Indian market for solar panels is dominated by Chinese companies that are supplying up to 90 per cent of solar modules at present.

However, these plans have been thrown into disarray after the solar industry's leading manufacturers issued a statement saying a crisis in module supplies is imminent. They have now written to the Ministry of New and Renewable Energy calling for an extension of the new customs deadline.

In response, Mr Singh told the Economic Times: "Of course, my orientation is 'buy Indian'. But there are no sufficient stocks to buy Indian. So, we are mulling over either timeline extension or duty extension. We haven't taken any view."

The fact that India relies so heavily on solar module imports from China, Vietnam and Malaysia remains a major bone of contention in its ambition to significantly boost solar power installation over the coming years.

According to India Brand Equity Foundation, the Asian nation was ranked fifth in world renewable solar power installation as of 2020, but it wants to add 114 GW of solar capacity by next year alone.

This would be more than its 175 GW target as laid out in the Paris Agreement and put the nation on track to achieve its goal of 280 GW of solar power by 2030.

However, it may be impossible if India cannot resolve its import and supply issues soon.