Government mulls 7 per cent tax on solar imports

NEW DELHI: The government may impose 7-7.5 per cent tax on imported solar panel to curb high imports from China, despite opposition from solar manufacturers and the Ministry of New and Renewable Energy.

“There is huge dumping of solar panels, especially from China. The government is of the view that a duty of 7-7.5 per cent should be imposed,” said a senior official from the finance ministry. The move comes in the backdrop of an ongoing anti-dumping investigation against solar panel, solar cell and module imports from China, Taiwan and Malaysia.

Indian industry is largely dependent on Chinese exports to meet its requirements. India is the largest buyer of solar equipment from China. Industry players also pointed out that the duty could increase the cost of solar energy in India. While the move may hit the domestic solar industry in the short term, it will eventually help local manufacturing of solar panels and reduce dependence on China, explained the official cited above.

“We do not want to be totally dependent on China for imports of solar panels. This may be initially attractive but will hurt the domestic industry in the long run,” the official added.

However, the industry feels that the move will derail the solar mission project. Prime Minister Narendra Modi had set a goal of installing 100 gigawatts of solar energy by 2022. The industry feels that’s an ambitious one as even when the sector performed well in the past, that was still below India’s annual targets.

The proposed move is also opposed by the renewable-energy ministry. “This is going to increase the cost of the solar project where bids are already being awarded. Some of the bids are very low and with the increase in price, the solar bidders may not be able to keep the price. This will affect future auctions,” said an official from the Ministry of New and Renewable Energy.

In this regard, the Indian Solar Association had already written to Finance Minister Arun Jaitley. “The Indian Solar Association believes that the Indian module manufacturers should be at level-playing field with foreign suppliers – that is in terms of technology, efficiency of deliverables, meeting demands, etc before they are brought at par on pricing terms with foreign suppliers,” the letter said.

“The government may accordingly consider giving price incentives, subsidised credit and other such financial incentives before introducing any ADD (anti-dumping duty),” it added.