ALMM and inverter compliance: MNRE’s current ALMM page publishes solar PV module and cell lists, not an inverter list. Verify the inverter’s exact model documents and applicable scheme or DISCOM requirements separately.
What is customs duty on solar
Basic Customs Duty (BCD) is the import tax applied to solar equipment entering India. BCD on solar PV modules and cells, introduced in April 2022 and revised in later Union Budgets, is a trade lever supporting domestic solar manufacturing, discussed in more depth in our BCD and import duty guide for solar inverters. Combined with Social Welfare Surcharge and IGST on imports, duty adds to the landed cost over the invoice value, by an amount that depends on the rate for the tariff line.
Where to find the duty for each item:
- PV modules and cells (HS 8541): check the current First Schedule and notifications
- Solar inverters (HS 8504 40): rate disputed between sources, so verify on CBIC
- Mounting structures, cables, batteries and EV chargers: each has its own tariff line, so check each item
Duty on modules has been one of the higher sectoral customs duties in India and a driver of domestic manufacturing expansion alongside the PLI scheme. Solar developers and EPCs shift to ALMM-listed Indian modules to avoid the duty, supporting Indian manufacturers.
Why customs duty matters
Project cost. Adds to capex for projects using imported modules, by an amount set by the rate in force.
Domestic manufacturing. Drives Indian capacity expansion.
PLI alignment. Customs duty + PLI scheme = comprehensive industrial policy.
ALMM relevance. Indian ALMM modules avoid the duty.
Pricing of Indian modules. Domestic prices can track import prices plus duty.
Total import burden calculation
The ₹10 figure is the invoice value of the imported module.
Technical deep dive
Customs duty by item
| Equipment | What to check |
|---|---|
| Crystalline silicon and thin film modules | Current rate for HS 8541 on CBIC; revised in recent Union Budgets |
| Solar cells | Current rate for HS 8541; revised in recent Union Budgets |
| Solar inverters | HS 8504 40; some listings show 20%, some guides about 7.5%; classification decides |
| Mounting structures, cables, junction boxes | Each item’s own tariff line |
| Batteries and EV chargers | Each item’s own tariff line |
Project cost impact
Duty enters a project through the landed cost of whatever is imported. For a utility plant using imported modules, the cost effect is the module share of capex multiplied by the duty-driven landed-cost increase. Work it out from dated quotes and the rate in force; do not carry a percentage from an older guide.
Indian module manufacturing response
| Year | Indian module capacity (GW/year) |
|---|---|
| 2020 | 10 |
| 2022 | 18 |
| 2024 | 60+ |
| 2026 (target) | 100+ |
PLI Phase I and II investments driving rapid expansion.
Exemptions and special schemes
| Scheme | Exemption |
|---|---|
| SEZ (Special Economic Zone) | Duty-free import for export |
| Bonded warehouse | Deferred duty payment |
| Project import scheme | Reduced duty for approved projects |
| Some PM Surya Ghar imports | Case-by-case bulk arrangements |
Bulk import arrangements for subsidised rooftop programmes are covered further in our guide to applying for PM Surya Ghar.
Real-world applications
Project cost budgeting.
Module sourcing strategy (Indian vs imported).
PPA tariff bidding.
Manufacturer location decisions.
ALMM list compliance verification.
Best practices
Source from ALMM-listed Indian manufacturers.
Verify duty applicability before import.
Use SEZ for export-oriented projects.
Document HSN classification accurately.
Consult customs broker for complex imports.
Indian market context
Duty on imported modules has supported Indian manufacturing expansion.
PLI Tranche I and II, administered under MNRE guidelines, support gigawatt-scale cell and module factories.
Major Indian module manufacturers (Waaree, Adani Green Solar, Tata Power Solar, Vikram Solar) at full capacity utilisation.
Cell manufacturing still ramping; some imports continue.
Future BCD reviews likely as domestic capacity stabilises.
Standards and certifications
| Standard | Scope |
|---|---|
| Customs Tariff Act 1975 | Statutory basis |
| CBIC notifications | Rate revisions |
| HSN classification | Equipment identification |
| MNRE ALMM | Domestic listings |
| PLI scheme guidelines | Manufacturing incentives |
Further reading
For how Customs Duty plays out in real projects, these guides go deeper:
- BCD and Import Duties on Solar Inverters India 2026
- GST on Solar Inverters and Panels 2026
- Solar Shading Analysis Software 2026: Guide
- Fronius vs SMA in India 2026: Are Premium European Inverters Worth It?
Sources
- Customs Tariff Act 1975.
- CBIC notifications on solar imports.
- HSN classification for solar equipment.
- MNRE PLI scheme documentation.
- Industry analysis of duty impact.
- IEA India Energy Outlook 2024.
- IRENA Renewable Energy Trade Analysis.
- BloombergNEF Solar Trade Studies.
- India Solar Sector Reports.
Frequently Asked Questions
What is customs duty on solar in simple words?
What is BCD?
What is the total import burden?
When was the duty imposed?
Why was duty imposed?
Has it worked?
Does it apply to all countries?
Can it be reduced?
Does it affect PM Surya Ghar?
What is the impact on project cost?
Is there a way around BCD?
Has Indian manufacturing capacity caught up?
What about EV chargers?
Does BCD apply to spare parts?
Is the duty likely to change?
From the Blog
Co-founder & CEO driving Qbits Energy's product strategy and growth across India.