Call for duty reset on inputs for wind power components

Proposal aims to correct the inverted duty structure that discourages domestic manufacturing

- Rituraj Baruah & Subhash Narayan

Although gearboxes for wind turbines are also made in India, turbine makers find it less expensive to import them rather than buy domestic ones.

(BLOOMBERG)

India’s push to localize wind turbine components may hinge on a crucial fix: making the specialty steel that goes into gearboxes for turbines cheaper to source.

The ministry of new and renewable energy has recommended lowering the 15% basic customs duty on this high-grade steel in the upcoming Union Budget, two people aware of the proposal said.

The import duty on special grade steel used for gearboxes is now 15% while that on gearboxes is 7.5%, making imported gearboxes more attractive for buyers than the ones locally-produced.

The proposal aims to correct the inverted duty structure that discourages domestic manufacturing, even as India imports nearly 100% of its specialty steel needs and has mandated greater localization of wind turbine components to cut reliance on imports.