The Minister of Power R.K. Singh has proposed that basic customs duty (BCD) be imposed on imported solar cells and modules from April 2021 in a letter to the finance minister of India. According to the letter, the Indian solar industry has become dependent on foreign photovoltaic (PV) cells and modules.

The letter mentioned that the Customs Tariff Head that solar cells and modules are under, is for products that were used in information technology equipment, this exempted cells and modules from basic customs duty. The letter went on to propose incremental year-wise custom duty slabs that should be imposed on these products. The proposed duties range from 10% from the first year up to 30%, in the third year. The imposition of BCD, as per the MNRE, is expected to give a boost to the domestic solar cell and module manufacturing industry.

However, the letter also asked the finance ministry to exempt products such as wafer, EVA, glass, silver, paste, frames, and structures, that are used to manufacture modules in India until December 31, 2023. After which 15% BCD could be imposed on these products as well. In addition, the minister of power recommended there be two different BCD tariff heads for solar cells and solar modules.

Last year, the Directorate General of Trade Remedies (DGTR) recommended a 25% safeguard duty on solar cell imports from China and Malaysia for the first year, followed by a phased down approach.