India to increase import duty on solar equipment in coming years, says R K Singh

In a bid to encourage domestic manufacturing, India will increase import duty on solar equipment down the value chain in the coming years, Power Minister R K Singh said on Thursday.

"Right now safeguard duty is imposed on solar equipment which will be diluted in few years. We will increase tariff on solar equipment down the value chain in coming years," the minister said at a curtain raiser press conference on 3rd Global RE-Invest.

Allaying fears that any hike in import duty may increase solar energy tariff bidding rate, he assured that it will not impact solar energy bidding process in India.

In July last year, India had imposed a safeguard duty on imports of solar cells from China and Malaysia for two years to protect domestic players from steep rise in inbound shipments of the product.

India had imposed 25 per cent safeguard duty on solar cells for July 30, 2018 to July 29, 2019 period. Now it has come down to 20 per cent for July 30, 2019 to January 29, 2020. It will further come down to 15 per cent during January 30, 2020 to July 29, 2020.

There has been a significant increase in imports of solar cells in absolute terms. Imports of cells jumped to 9,790 MW in 2017-18 from 1,275 MW in 2014-15. India produced 842 MW solar cells in 2017-18.

Certain domestic players had claimed that on account of the surge in imports of the cells, many domestic producers have kept their production facilities almost idle and the heavy losses have crippled the domestic industry.

Solar cells, electrical devices that convert sunlight directly into electricity, are imported primarily from China, Malaysia, Singapore and Taiwan.

Imports of cells from these countries account for more than 90 per cent of the total inbound shipments in the country.

The minister also said that a power storage policy will be unveiled soon which would provide tax incentives, especially for solar equipment manufacturing in India.

The government is encouraging storage segment to push renewables as well as electric mobility.

On the change in administration in Jammu and Kashmir, Singh said: "We will utilise all of India's share of water to develop hydro projects and also push solar projects in Ladakh."
On the recent row over tariff negotiations with Andhra Pradesh, he said, "Power purchase agreements are sacrosanct. No concluded agreement can be opened."