• Media reports say MNRE has proposed for the imposition of BCD on imported solar cells and modules starting from August 1, 2020
  • For solar cells, the BCD limit has been proposed between 10% to 15% in the first year to be scaled up to 40% in the second year
  • For solar modules, the limit is suggested to be within 20% to 25% in the first year, raised up to 40% in the second year

The Ministry of New and Renewable Energy (MNRE) in India has shared details of its proposal to impose a basic custom duty (BCD) on imported solar modules, solar cells and solar inverters with effect from August 2020. The idea is not new – in September 2019, MNRE had recommended the Ministry of Finance to impose such a duty on imported solar cells and modules, though to start a year later, from April 1, 2021 (see MNRE For Customs Duty On Imported PV Cells & Modules).

Speaking to reporters during a virtual conference on June 25, 2020, MNRE head RK Singh said his ministry has proposed BCD between 20% to 25% on solar modules to be raised up to 40% in the second year, reported the Press Trust of India (PTI). He further said a 10% to 15% BCD has been proposed for solar cells in the first year to be increased up to 40% from the second year onward. It is not clear what the ministry’s recommendation is for solar inverters, however these efforts are being made by the government to encourage domestic manufacturing of this very integral technology to meet the country’s renewable energy ambitions instead of relying on foreign imports.

Since July 30, 2018, developers have to pay safeguard duty on solar cells imported from China and Malaysia, whether or not assembled in India, that started from 25% and has come down to 15% and it shall remain so till July 29, 2020. If the BCD proposal comes into force, it will replace the safeguard duty.

In March 2020, the Indian Solar Manufacturers Association (ISMA) filed an application with the Directorate General of Trade Remedies (DGTR) to extend the period of the safeguard duty. In response, DGTR launched a review investigation.

Meanwhile, the Ministry of Finance has imposed anti-dumping duties (ADD) on aluminum and zinc coated flat products from China, Vietnam and Korea that are used in solar projects with the aim to protect the domestic industry, according to Mercom India Research. It will be imposed from October 15, 2019 for a period of 5 years.