New duty regime on table to reduce power imports

To discourage imports in the power equipment sector, India will set up a new duty structure, R K Singh, minister of state for power, new and renewable energy, said on Thursday. He said solar gears coming into India would be levied basic Customs duty of 20-40 per cent. There is currently no Customs duty on any solar equipment import.

Close to 75 per cent of India’s solar power capacity is built on Chinese solar modules. It is also one of the top-10 imported items from China. “It has been proposed that a basic Customs duty of up to 25 per cent will be imposed on modules in the first year. In the next year, it goes up to 40 per cent,” said Singh.

For solar cells, the basic Customs duty would be 15 per cent this year and 20-30 per cent from next financial year.

For non-solar electric equipment, he said there would be a novel duty structure that will hinder imports as there is sufficient domestic manufacturing for the same. “For the conventional power industry, whatever is being made here in India, I would consider levying duties where there is no duty. These will vary as some states have ‘free-trade agreements’ with some countries for certain products. So, the duty structure would be such that it encourages people to buy domestic,” Singh said.

He said every product would be checked when they are imported. “There have been sufficient information regarding cyber-attacks through power infrastructure. Every country has taken measures to protect their power systems, so shall we,” the minister said. There will also be a list of ‘prior-reference countries’ from where imports would need government approval.