Manufacturers want 50% basic customs duty on solar imports

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All India Solar Industries Association (AISIA) has urged the government to impose at least 50% basic customs duty (BCD) on solar equipment with immediate effect to ensure domestic manufacturers’ survival.

AISIA said that Indian solar manufacturers had been struck with their exports witnessing a significant downfall due to coronavirus-prompted disruption. The BCD can give further impetus to the Prime Minister’s Vocal for Local movement and help the manufacturers strengthen their position in the domestic market.

While safeguard duty and the government’s recent decision to provide land near ports to set up manufacturing units has been a step in the right direction, solar manufacturers are imploring for an immediate respite.

“The survival of the manufacturers requires the Government to look into the restructuring of existing policies like the implementation of at least 50% BCD and Approved List of Models and Manufacturers, without which the future of the domestic solar module manufacturers seems bleak and dwindling,” said AISIA chairman Dr Hitesh Doshi.

Doshi added, “Pass-through benefits [protecting against future duty and tax rises at the point of placing orders] or grandfathering [a new rule that exempts certain existing situations] provision for module imports does not give [the developers] options to buy solar modules from local manufacturers. So far, more than 32,000 MW PPAs have been issued, for which approximately 45000 MW modules will be imported in the next three years.

“If the same benefits are given to local manufacturers, the country will save thousands of jobs but also huge foreign exchange. Developers will have the option to buy from India, and Indian manufacturers will survive.”

India imported solar equipment worth $1.3 billion from China in FY20. This shows the potential the sector holds for the domestic manufacturers to contribute to the GDP, should the focus be shifted towards enabling the local players. Weaning off dependency on China and other international markets will also save Foreign Exchange—AISIA stated.

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