Costlier Solar Power a Fallout of India-China Border Clash

Government firms stop buying Chinese solar equipment, while private firms face higher tariff.

In early July 2020, Raj Kumar Singh, India’s minister of power, said that state-owned companies would no longer import solar energy equipment from China. Plus, a mix of tariff and non-tariff barriers are being planned to discourage imports from China by other firms.

This came just days after a bloody border clash between Indian and Chinese troops.

Singh had earlier expressed concern about high imports of solar panels and inverters, especially from China, and said they were a “cause for concern in the renewable energy sector”.

India imports 8,000-10,000 MW of solar modules each year, close to 90% from China.

Solar cells and modules are currently exempt from basic customs duty (BCD) on imports. However, they face a 15% tariff called safeguard duty, meant to protect domestic manufacturers from dumping by another country.

This safeguard duty is scheduled to end this July. In its place, the government plans to impose a BCD of anything between 20 and 25% on solar equipment imports, intending to raise it to 40% next year.

Imports from China for solar projects will be exempt from this high additional cost if electricity providers and power purchasers sign Power Purchase Agreements (PPAs) before 1 August.

Hitesh Doshi, chair of the All India Solar Industries Association – a group of domestic manufacturers – said solar project developers being exempt from BCD on Chinese imports is resulting in India losing nearly INR 50,000 crore (about $6.7 billion).Read More..

Source : thequint