AISIA Bats for 50% BCD on Solar Equipment

The Body urged Government of India on immediate implementation of BCD

All India Solar Industries Association (AISIA) has urged the government to impose at least 50% basic custom duty (BCD) on solar equipment for sustenance of domestic manufacturers. The country’s dependency on China for solar imports in FY20, was recorded at imports worth $1.3 billion. The government would do well to heed the advice of AISIA post due diligence.

Per a PTI report, “According to AISIA, following the coronavirus-related disruption, the Indian solar manufacturing sector has witnessed a major downfall with exports witnessing a decline. AISIA has urged the government of India for immediate implementation of BCD for sustenance”.

The report quoted an AISIA statement, “This is also the time when the government can further give impetus to the Prime Minister’s Vocal for Local movement and help the local manufacturers strengthen their position in the domestic market.” While Safeguard Duty and the recent decision by the government to provide land near ports to set up manufacturing units has been a step in the right direction, solar manufacturers are imploring for an immediate respite, it said.

“The survival of manufacturers requires the government to look into restructuring of existing policies like implementation of at least 50 per cent BCD, ALMM (Approved List of Models and Manufacturers); without which the future of the domestic solar module manufacturers seem bleak and dwindling,” said, AISIA Chairman Hitesh Doshi.

This shows the potential the sector holds for the domestic manufacturers to contribute to the GDP, should the focus be shifted towards enabling the domestic players, Doshi said adding that the weaning off dependency on China and other international markets will also save foreign exchange.

Also, provision for pass though or grandfathering for imports of modules does not give options to buy solar modules from local manufacturers. ”Grandfathering” is a provision in which an old rule continues to apply to some existing situations while a new rule will apply to all future cases. “So far more than 32,000 MW PPA (power purchase agreement) are allotted for which approx. 45,000 MM modules will be imported in next three years if the same benefits are given to local manufacturers, we will not save thousands of jobs but huge foreign exchange also,” per AISIA. Developers will have the option to buy from India and Indian manufacturers will survive, according to the body.

Prior to this, replying to Power and New and Renewable Energy Minister RK Singh announcement that Chinese imports for public solar projects will be exempted from duty if power purchase agreements are signed before August 1, 2020; AISIA, had stated, “India will lose nearly Rs 50,000 crore in foreign exchange (forex) if solar power developers (SPDs) are given exemption from basic customs duty on Chinese imports.”

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Saumy Prateek

Saumy has been a writer with Reuters, Mercom India and Rystad Energy.