In a bid to propel domestic manufacturing and curb the procurement of solar power equipment from China, the government is reportedly planning to bring the basic customs duty (BCD) on imports of such products.
It is worth noting that the solar imports from China have dropped to an extent after the imposition of the safeguard duty, however it still remained the largest source of solar cells and panels in April-December FY20 with imports worth $1.2 billion.
According to FE a 20% BCD on these products was proposed in the Budget, but the MNRE had clarified that the levy will not be imposed at least till the expiry of the safeguard duty regime.
The publication citing sources reports that MNRE will soon send its recommendations to the finance ministry, suggesting levying 20% BCD on imports of solar cells and panels.
The duty is expected to be increased progressively to 30% and 40%.
After the imposition of safeguard duty the imports of solar equipment fell 60.2% between FY18 and April-December FY20, while imports from China declined 65.5% in the same period.