BUDGET: FM Proposes Amending Duties For Solar Cells, Modules

Union Finance Minister Nirmala Sitharaman today presented the Union Budget 2025. Although the minister did not explicitly use the word ‘renewable’ in her speech or announce any scheme or support for the sector exclusively, the finer details of the budget document revealed some changes.

The budget documents revealed that the government has decided to amend the duties for the imports of solar cells and solar modules into the country. The documents revealed that the government has decided to decrease the tariff rate for solar modules from the existing 40% to 20%. This will be effective from tomorrow (February 2, 2025). This decrease in tariff rate will be with the reduction in the effective rate from this date.

Tariff Changes For Solar Cells & Modules 

Details of proposed changes in solar cell and module tariff rates

The document said that the government has also proposed to decrease the tariff rate for solar cells from the existing 25% to 20%. This will be followed with no change in the effective rate from February 2, 2025.

The minister also said that the government has proposed to augment the growth of manufacturing sectors like domestic solar cell production.
“Given our commitment to climate-friendly development, the Mission will also support Clean Tech manufacturing. This will aim to improve domestic value addition and build our ecosystem for solar PV cells, EV batteries, motors and controllers, electrolyzers, wind turbines, very high voltage transmission equipment and grid-scale batteries,” the minister said in her speech.

FM announced special support to the manufacturing sector.

Boosting EV Growth 

Sitharaman also proposed exempting items to boost the production of electric vehicles in the country. “To the list of exempted capital goods, I propose to add 35 additional capital goods for EV battery manufacturing, and 28 additional capital goods for mobile phone battery manufacturing. This will boost domestic manufacture of lithium-ion batteries, both for mobile phones and electric vehicles, she said.

The development comes at a time when several clean energy industry representatives earlier were expecting more tax rebates like in GST for solar industry-related equipment, including ingots and wafers under ALMM-like support among others. Last year, the minister talked about PM Surya Ghar scheme, reintroducing ALMM among others.

The minister also talked about the giving government support to critical minerals. “In the July 2024 Budget, I had fully exempted BCD on 25 critical minerals that are not domestically available. I had also reduced BCD of 2 other such minerals to provide a major fillip to their processing especially by MSMEs. Now, I propose to fully exempt cobalt powder and waste, the scrap of lithium-ion battery, Lead, Zinc and 12 more critical minerals. This will help secure their availability for manufacturing in India and promote more jobs for our youth.”