The Indian government may impose a solar-like safeguard duty on wind turbine components to curb Chinese imports.
With the recent border dispute with China along the Line of Actual Control, the Indian government is looking to reduce dependence on Chinese imports by discouraging developers to import Chinese equipment and encourage investors to develop domestic manufacturing facilities.
According to government sources, the government is planning to levy higher taxes on wind turbine components and generators to encourage the use of domestic wind turbine equipment.
China is the biggest supplier of wind equipment to Indian companies and therefore a higher duty will affect the imports of components from China. Unlike the solar sector, wherein India imports 80% of the equipment from China, the Indian wind manufacturing industry is better positioned and the majority of the wind turbines, i.e. around 80%, are manufactured in India, with only a few minor items imported from China.
The current concessional duty on wind equipment imports stands at 5%. This duty is expected to increase to a level similar to solar equipment imports to boost local manufacturing. India imports equipment like special bearings, gear box, yaw components, wind turbine controllers, blades for rotors, sub-parts of blades, catalysts for use in the manufacture of cast, and resin for use in the manufacture of cast components of wind-operated electricity generator.
The higher duty structure is expected to be implemented from the next fiscal year to provide ample time to domestic manufacturers and wind industry to look for suitable alternatives.
This move will strengthen the Indian government initiative of ‘Atma Nirbhar Bharat’ which aims to make India self-reliant.
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