Mumbai: The exemption of basic custom duty (BCD) on capital equipment for solar manufacturing and the removal of the exemption on solar glass announced in the Union Budget 2023-24 on Wednesday has received a mixed response from the industry.
While on one hand it is said to boost the domestic manufacturing landscape but on the other hand industry players feel that it is crucial to reduce dependence on other countries for the components.
Ravi Shekhar, managing director, Eninrac Consulting, said that for large-scale manufacturing projects, sourcing capital equipment will lead to a 3 per cent to 5 per cent reduction in overall capital expenditure.
“For large-scale manufacturing projects, sourcing capital equipment will lead to a 3 per cent to 5 per cent reduction in overall capital expenditure, potentially resulting in savings of 1 per cent to 1.5 per cent on the total manufacturing plant capex due to lowered BCD. This will enhance the competitiveness of domestic OEMs compared to their global counterparts,”
He, however, added that despite this the domestic OEM modules were expected to remain costlier with prices anticipated to be 5 per cent to 7 per cent higher compared to the previous 10 per cent margins seen in large-scale manufacturing with respect to the imported ones.
On the cost of solar glass he said that it varies between $3-$10 per square meter based on quality and contributes 5 per cent to 10 per cent to the overall cost of solar module manufacturing.
