India's New Deal: Allows developers to import components at a 5% discount to avoid basic tariffs
2022.Jul 29
Recently, the Advance Ruling Bureau of Indian Customs allowed the import of all components of solar projects at a preferential tax rate of 5%, thus circumventing the basic duty.
To facilitate local manufacturing of solar cells and modules, the Indian government has introduced several tariff barriers such as a safeguard duty of 25%-15% effective July 2018-July 2021 and effective April 1, 2022 , 40% basic duty (BCD). These tariffs have increased the cost of solar projects across India, forcing developers to seek cost-saving ways to bypass them.
However, in a recent petition, Aquila Solar Power (Vibrant Energy Holdings), a Telangana-based solar project developer, asked the authorities to consider allowing it to import all components of the project at a preferential tax rate of 5%.

Modules are the most prominent cost element of solar power projects, accounting for more than half of the overall project capital expenditure (CAPEX). The authorities' decision contradicts the Indian government's indigenous policy of promoting solar module manufacturing.

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