India is considering a major drop in import levies on solar panels as it struggles with scarcity in domestic manufacturing due to the rising demand for renewable energy. According to official sources, the country’s minister of renewable energy is negotiating with the finance ministry to reduce the import duty on solar panels from 40% to 20%. These sources, who wished to remain anonymous because the decision has not yet been finalized, also say that both ministries are thinking about recommending that the current 12% goods and services tax (GST) on solar panels be reduced to 5% in consultation with the Indian Good and Services Tax Council.
NewsOTG gathered that India placed a 40% import tariff on solar panels and a 25% levy on solar cells in April 2022 as part of Prime Minister Narendra Modi’s commitment to increase the nation’s potential for renewable energy and lower emissions. According to one of the government sources, the domestic manufacturing capacity has fallen short and imports are now necessary to fill the gap. This idea is consistent with Modi’s ambitious plan to install 365 gigawatts (GW) of solar power by 2031–2022, which is an essential part of India’s overall strategy to encourage sustainable habits, including the use of sustainable aviation fuel and electric vehicles.
While the finance ministry has not yet officially responded to inquiries, a representative for the Ministry of renewable energy has promised that a response will be given as soon as possible. India seeks to support the expansion of its renewable energy sector by lowering import levies on solar panels and pursuing a lower GST rate. These policies are anticipated to encourage investment, draw in foreign players, and assist the country’s rapid expansion of solar power output. India’s action shows its commitment to sustainability and underlines its willingness to achieve its ambitious renewable energy targets, especially in light of the global focus on reducing climate change and switching to clean energy sources.