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Indian government rejects industry plea for import duty on solar modules

According to reports, the Union Government has ruled out the imposition of a customs duty on imported solar modules.

A senior official of the Ministry of New and Renewable Energy (MNRE) told Business Line today that the Government is bound by international agreements in which it has committed not to impose customs duty on products used in solar power generation.

The official said the Ministry has received representations from Indian (module and cell) manufacturers seeking duty protection against cheap imports. (The manufacturers allege dumping by the Chinese and selling of modules backed by cheap credit by the Americans.)

The official said that his Ministry had not yet sent its recommendations to the Ministry of Finance. He said that the issue was being examined in the MNRE.

He stressed that the government would “find some way” to protect the local manufacturers. When asked if incentives would be given to the domestic industry, he said “it is being considered.”

There are 51 module manufacturers in India, nine of whom also make cells. These units have a combined capacity of 1,500 MW. Today, this industry is working at less than a fifth of the capacity, although, thanks to the solar mission and the various state programmes, some 1,000 MW worth of plants are under construction in India. The demand is being met almost entirely by imports. Ironically, at a time when the Rs 80,000-crore National Solar Mission is being rolled out, domestic companies are struggling for a pie of the market.

It is against this backdrop that the local manufacturers have sought protection.

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