Rs 50K Crore Loss in Forex if SPDs Exempted from Customs Duty: AISIA

India will lose nearly Rs 50,000 crore in foreign exchange (forex) if SPDs are given exemption from basic customs duty on Chinese imports, AISIA has said.

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, the All India Solar Industries Association (AISIA) has said.

On July 1, 2020, Power and New and Renewable Energy Minister RK Singh had said that Chinese imports for public solar projects will be exempted from duty if power purchase agreements are signed before the implementation of duty, which is proposed from August 1 this year.

With safeguard duty scheduled to end on July 31, 2020, the government has proposed to impose a 20-25 percent basic customs duty on solar modules and around 15 percent on cells, that will gradually go up to 40 percent for both.

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“We are happy that the government is taking measures to promote domestic manufacturing. But at the same time, it will have to also address the challenges which the domestic manufacturers are facing currently due to lack of clarity on the policy front and delay in implementation of duties, amongst others,” AISIA Chairman Hitesh Doshi said.

He noted that there are nearly 25 GW of contracts that have been awarded for which the government has allowed developers to avail the pass-through benefits which will exempt imports from China from the duty.

“The government’s decision on the “pass-through” clause will adversely impact domestic manufacturers as they will have no orders for the next 2-3 years. Already the COVID-19 crisis has affected the manufacturers and this will add to our woes,” Doshi added.

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India currently imports nearly 85-90 percent of modules from China among other components.

Doshi further noted that in the absence of support from the government, not only will expansion capacities fail to take off, the existing domestic solar manufacturing industry will also come to a standstill and cease to exist with more and more companies becoming bankrupt.