Follow India Renewable Energy News on WhatsApp for exclusive updates on clean energy news and insights

Solar Gear Makers Seek Duty Exemption on Capital Goods

India’s solar equipment manufacturers are urging the government to exempt import duties on capital goods, arguing that it would accelerate domestic solar PV manufacturing and support the nation’s ambitious renewable energy targets.

Key Industry Demands

• Duty-Free Imports for Machinery: Manufacturers argue that import duties on capital goods increase project costs, making Indian-made solar panels less competitive.
• Boosting Domestic Production: While India aims for self-reliance in solar PV manufacturing, critical machinery is still imported, primarily from China and Europe.
• Aligning with Global Practices: Countries like Vietnam and the U.S. provide tax breaks and incentives to support solar manufacturing, which Indian players seek as well.

Government Policy Considerations

• Basic Customs Duty (BCD): India has imposed a 40% duty on imported solar modules and 25% on solar cells to promote local production. However, no such exemption exists for manufacturing equipment.
• PLI Scheme Impact: The Rs24,000 crore Production Linked Incentive (PLI) scheme is encouraging new manufacturing units, but high import costs for machinery remain a concern.
• Competitiveness vs. Protectionism: While the government aims to reduce dependence on imports, industry leaders argue that temporary duty exemptions could speed up technology adoption and cost reduction.