To encourage domestic production of the solar panels, the government is preparing to impose a basic tariff of up to 40 percent on solar modules and cells imported into the country.
The BCD will be levied on solar imports starting April 1 this year and is part of the government's plan to reduce reliance on imported equipment.
According to a statement from the Ministry of New and Renewable Energy (MNRE), solar modules imported from abroad are charged a 40 percent fee, while solar cells are charged a 25 percent tariff, reports the Economic Times.
“Given India's huge solar targets and the fact that power is a strategic industry, India needs to develop domestic solar manufacturing capacity and reduce its dependence on imports to avoid future disruptions,” the ET statement said.
According to the report, domestic solar equipment manufacturers have been expecting the tariff on solar imports since Finance Minister Nirmala Sitharaman included it in her Union budget proposal in 2020.
The Union's Minister of Energy and Renewable Energy, RK Singh, stated in June last year that such a basic tariff should be introduced from August 1, 2020 in order to prevent the dumping of Chinese goods and protect national interests.
However, due to disagreements between the Treasury Department and MNRE, the implementation of the BCD has been delayed.