Make in India Push: India Recommends 70 percent Excise Duty on Solar Cells Imported from China and Malaysia

India's Finance Ministry has proposed a 70 percent import duty to safeguard India’s domestic manufacturing industry

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Most of the solar equipment used in India today is imported from fellow Asian countries China and Malaysia. Infact, India is the largest importer of solar cells from China. The downside of this has been that the local manufacturing industry has found it hard to compete against the solar imports.

To tackle that and to boost solar equipment manufacturing under Make in India, India’s Finance Ministry has proposed a 70 percent import duty to safeguard India’s domestic manufacturing industry, citing that foreign imports are a ‘serious threat’ to the local manufacturers.

The proposed hike on the import of solar cells will be initially implemented for an initial trial period of 200 days. And if the government sees a positive change in local manufacturing, it might consider making the move permanent.

“Existing critical circumstances justify the immediate imposition of a provisional safeguard duty in order to save the domestic industry from further serious injury, which would be difficult to repair,” the Finance Ministry said in the document.

In an address to the media, Dhruv Sharma, Governing Council Member, Indian Solar Manufacturers’ Association (ISMA) said, “the Provisional findings of the DG safeguard establishes two points. Firstly it validates our petition, of aggressive  dumping of solar cells and modules from China, Taiwan and Malaysia and causal and significant injury to the domestic  manufacturers.

“Secondly it clearly reflects the resolve of the Government of India to support Make in India, initiative specially in a sensitive and strategic sector as Solar Power. We are indeed gratified by the findings and sincerely hope that the Provisional duty will be levied at the earliest. We are confident that this will trigger a large investment in Solar Manufacturing in India in a short time, enabling India to become a global manufacturing hub for solar products,” he further added.

Solar energy remains one of the key areas where the current NDA government wishes to make a mark. Prime Minister Narendra Modi has envisioned a total of 100 GW of solar energy being produced in the country by 2030. However, as of now, India only produces solar cells domestically that account for about 3 GW of solar energy against a requirement of 20 GW. The rest of the demand is met by Chinese imports.

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