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The levy on modules will then almost double to 40% within a year and cells will see a similar rise, from an initial rate of 15%.

The Economic Times newspaper has reported the Indian government is considering levying a basic customs duty of 20-25% on imported solar panels from August with the tax to rise to 40% within a year.

Solar cells would attract 15% customs duty from August, the Times reported, quoting minister for new and renewable energy RK Singh, with that figure to rise to 30%.

Solar cells and modules—the majority of which are imported from China—are exempted from basic customs duty at present but attract a 15% ‘safeguarding duty’ until July. China accounted for close to 80% ($1,694.04 million) of India’s cell and module imports last year, amounting to $1.69 billion of $2.16 billion worth of imported solar products.

Minister Singh reportedly said all imported goods will have to be tested in Indian laboratories to ensure they adhere to local standards and to be checked for the presence of malware.

Tensions

The moves come at a time of raised tensions between the two nations after a highly-publicized recent border clash between troops.

Citing power as a strategic sector, Minister Singh has previously said in a press statement: “Everything, including communication, data services, health services, logistics, defense manufacturing etc. depends on [the] power sector. Therefore, there is a need to reduce dependency on [imports] in the power sector to protect the safety and security of our country.”

Financing available from the Power Finance Corporation, Rural Electrification Corporation and Indian Renewable Energy Development Agency will be structured such that lower rates of interest will be offered to developers which use Indian-made equipment.

The minister also repeated an approved list of models and manufacturers for solar projects would be made effective from October 1. “This will ensure that all solar power projects which are bid out as per the standard bidding guidelines, will be required to procure solar cells and solar modules and other equipment from manufacturers figuring in the approved list,” the minister said.