To incentivise home manufacturing of photo voltaic modules and cells, the federal government is planning to introduce a fundamental customs responsibility (BCD) on import of kit for the sector. The thought is to start out with a small responsibility and step by step elevate it to 20%, in order that native solar energy builders, who rely quite a bit on imports from China, don’t take an enormous hit within the quick time period.
The BCD introduction can be concurrent with the removing of the present safeguard duties on import of photo voltaic tools from China and Malaysia in July this 12 months. Anand Kumar, secretary, ministry of recent and renewable vitality (MNRE), informed 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 might be launched in a gradual method, “maybe 1-2% to start with” after which enhance it as much as 20% over a time frame.
In 2018, the federal government imposed safeguards duties on import of photo voltaic cells and modules from China and Malaysia for 2 years to arrest a sudden surge in imports from these international locations. The responsibility was a near-prohibitive 25% within the first 12 months, however got here right down to 20% for the subsequent six months after which to 15%. The safeguard duties will go in July this 12 months.
Industry sources really feel the BCD will prone to be launched subsequent 12 months to assist the native producers dealing with the double whammy of safeguard responsibility and now the slowdown resulting from Covid-19. The responsibility is prone to be elevated to 10% in three years and to 20% in round 7-Eight years, these sources say.
India presently has photo voltaic modules manufacturing capability of 7-Eight gigawatts (GW). This consists of the items of gamers like Adani Solar, Tata Solar, Waaree Energies and Vikram Solar. As per the ministry of commerce knowledge, within the final one-and-a-half years, for the reason that safeguard responsibility was imposed, imports of photo voltaic cells and modules have fallen drastically. Imports of cells, which stood at $2.15 billion in 2018-19, have lowered to $1.four billion in FY20, as much as November. Cell imports had peaked at $3.83 billion in 2017-18.
“The safeguard duty has had a positive impact on Indian manufacturers of solar equipment as their share in total project installation increased to 25% in 2019 from 15% earlier. However, a major chunk of this was due to the order from Neyveli Lignite for its 1500 MW solar project,” stated Jyoti Gulia, founder and director of Delhi-based advisory agency JMK Research. According to MNRE, India has a complete 87.2 GW renewable vitality capability, whereas 55 GW is within the pipeline and one other 33 GW is below bidding stage. Another 15 GW can be bid out earlier than 2020.