India Announces Tariffs of Up to 40% on Imported Solar Modules

India has now decided to impose a 40 percent basic customs duty on the import of solar modules effective next year, which aims to boost local production, in a move which experts say may decrease demand. 

Rating agency India Ratings & Research (Ind-Ra) said the increased tariffs could discourage solar projects as it will increase overall project costs. 

Senior analyst of Ind-Ra Asmita Pant said, “The increase in tariffs will increase power purchase costs for solar off-takers by Rs 9 billion (Rs 900 crore) annually, considering that around 10 GW of solar capacity will come on stream in the next 12 months.”

The move will also include a 25 percent duty on imported solar cells.

“This amount will keep on increasing exponentially with the commissioning of new projects, till the duty is in place or import costs and cost of local manufacturing achieve parity,” Pant explained. 

The decision may also affect India’s target solar capacity of 280GW by the year 2030, the senior analyst added.

India said the duty will cover projects already bid and commissioned after its implementation on April next year.

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