India has cut the customs duty on imported solar cells and modules under its Union Budget 2025
While the duty on solar cells is down from 25% to 20%, for modules it has been lowered from 40% to 20%
The solar sector has been allocated INR 242.24 billion out of the INR 265.49 billion budget for renewable energy
India has officially lowered the Basic Customs Duty (BCD) on imported solar cells from 25% to 20%, and on solar modules from 40% to 20% which should boost the country’s PV installations as it targets 500 GW of non-fossil fuel power generation capacity by 2030.
The country’s Minister of Finance Nirmala Sitharaman made the announcement while presenting the Union Budget 2025 that covers FY 2025-2026. These revised tariff rates came into effect from February 2, 2025. Introduced to support the domestic solar PV manufacturing sector, the BCD has been in place since April 1, 2022 (see India Imposes Basic Customs Duty On Cells & Modules).
Imposed under tariff heading 8541, the 25% duty on solar cells had an additional 2.5% Social Welfare Surcharge (SWS), while there was an extra 4% SWS for the 40% tariff on imported solar modules.
For now, the revised duty structure lowers the tariff on solar cells to 20%, but with an additional 7.5% Agriculture Infrastructure and Development Cess (AIDC). For solar modules, the duty is now 20% with an additional 20% AIDC.
With these tariffs, solar module prices can be expected to drop further providing access to local developers to cheaper modules majorly from China. The interest of the domestic solar manufacturing industry is being taken care of by the government under the Approved List of Models and Manufacturers (ALMM), which includes only locally produced PV modules for use in government/government-related projects. From June 1, 2026, there will be an ALMM for solar cells as well (see India To Impose ALMM For Solar Cells From June 1, 2026).
The focus of the budget is also on promoting Make in India as part of which Sitharaman announced a National Manufacturing Mission. This mission will also support cleantech manufacturing. “This will aim to improve domestic value addition and build our ecosystem for solar PV cells, EV batteries, motors and controllers, electrolyzers, wind turbines, very high voltage transmission equipment and grid scale batteries,” said Sitharaman.
For the renewable energy sector, the ministry has allocated INR 265.49 billion ($3.05 billion), which is an increase of over INR 191 billion it was allotted for FY 2024-2025 (see India PV News Snippets: MNRE’s FY 2024-25 Budget Allocation Up By 143% & More). Of this, INR 242.24 billion ($2.78 billion) has been reserved for the solar energy segment.
The government has also allocated INR 200 billion ($2.3 billion) to its flagship rooftop solar scheme, PM Surya Ghar Muft Bijli Yojana.
Additionally, India is also promoting nuclear power with a target of at least 100 GW by 2047 under the Nuclear Energy Mission for Viksit Bharat plan. The Finance Minister said this is essential for the country’s energy transition efforts. Details of the budget presented are available here.
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