Duty concessions for wind turbine components may continue

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BENGALURU: The ministry of new and renewable energy (MNRE), which was considering withdrawal of the customs duty concessions it provides wind turbine manufacturers, is now in favour of continuing these concessions for some time, sources said.

MNRE held several rounds of discussions with Indian wind equipment makers about the duty concessions. It held the view that use of local equipment would be encouraged if duty concessions are withdrawn.

“Most of these imported components in the turbines made in India come from China. So the idea was proposed as a reaction to the geopolitical issues,” a source said, requesting anonymity. “But the industry wanted the decision deferred, so MNRE has done that.”

Unlike the solar industry, where 90% of modules come from China, close to 85% of the wind turbines used in India are also manufactured locally. A few important components, however, are imported, mostly from China. By withdrawing the concessions, the government was hoping to increase the indigenous component of Indian wind turbines to 95-100%. “100% might actually not be desirable, as the cost might go up,” the person said.

The withdrawal was expected to start from April 2021 onwards. The ministry had planned to gradually phase out imports.

Queries sent to a senior MNRE official remained unanswered.

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