Nudging Towards Sustainability: India Adds 10% Import Duty on Solar Glass

This week, Nirmala Sitharaman, the Finance Minister of India, presented the Union Budget for the fiscal year 2024-25 at the Lok Sabha. A notable highlight was the focus on enhancing the renewable energy sector, particularly solar energy, and the strategic measures proposed to boost domestic manufacturing.

Key Budget Proposals

The budget outlines a significant change in the import regulations for the solar energy sector. Specifically, it proposes waiving the basic customs duty (BCD) on select machinery and tools used in the production of solar cells and modules. These items, which previously faced a 7.5% customs duty, will now be imported duty-free. This adjustment is expected to lower the operational costs for manufacturers of solar cells and modules.

Additionally, the timeline for import duty exemptions has been extended to March 31, 2026, for specific materials used in manufacturing silicon wafers, EVA (ethylene vinyl acetate) sheets, and flat copper wire for photovoltaic ribbons. This extension provides a broader range of importable materials for the industry.

New Import Duties on Solar Glass and Tinned Copper Interconnects

Despite the favorable import regulations, a notable exception has been introduced. Starting October 1, solar glass, a critical component in the production of solar cells or modules, will be subject to a 10% customs duty. Similarly, tinned copper interconnects, which are vital for solar cell or module production, will incur a 5% customs duty from October.

The finance minister justified this move by highlighting India’s strong domestic production capabilities for both solar glass and tinned copper interconnects. As part of this adjustment, the existing customs duty exemptions for these components will be discontinued.

Changes in Customs Duty Exemptions for Renewable Energy Equipment

In line with these changes, the customs duty exemption for active energy controllers (AEC), essential for manufacturing renewable power system inverters, will end on September 30.

Continued Support for Battery Manufacturing

On a positive note for the battery manufacturing sector, BCD exemptions for parts and raw materials used in fabricating lithium-ion cells have been extended until March 31, 2026. This extension includes specific parts and components crucial to lithium-ion battery and battery pack production. Key materials such as lithium, copper, and cobalt will continue to be exempt from customs duties.

As India takes significant strides towards sustainability by encouraging domestic manufacturing in the solar sector, ACE Battery stands ready to power this green revolution. With our advanced lithium-ion batteries and comprehensive energy solutions, we are committed to supporting India’s renewable energy goals. With the government’s focus on reducing operational costs for manufacturers, now is the perfect time to invest in ACE Battery products and contribute to a cleaner, greener future.