The government has decided to implement a basic customs duty of 40 per cent on solar photo-voltaic modules and 25 per cent on solar photo-voltaic cells. This duty will come into force in 2022-23, allowing for some time to adjust, and is in effect designed to upgrade and replace the current 15 per cent safeguard duty on such imports from specific countries, including China. The government’s thinking on these issues is opaque and contradictory. But, seen together with some other recent moves, it is likely that policymakers feel there is an excessive dependence on imported solar power generation components in the Indian renewables sector. Some claim this raises security issues; for others this means supply chains are not resilient. However, these concerns must be examined against the costs of protectionism for the sector, and that does not seem to have been done.
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First Published: Tue, March 16 2021. 01:58 IST