The Indian Primary Copper Producers Association is urging the government to double customs duties on solar PV ribbons and busbars to 10%. They are also seeking a GST reduction to 5% to ease cash flow stress caused by record-high global copper prices. This proposal aims to support domestic manufacturing against cheaper imports, though it could affect the costs of solar energy projects.
The Indian Primary Copper Producers Association, representing major players like Hindalco, Vedanta, and Adani’s Kutch Copper, has formally requested that the federal government raise customs duties on imported solar photovoltaic ribbons and busbars. The industry group is pushing for the tax to increase from the current 5% to 10%. This proposal is designed to protect local manufacturing facilities from a flood of low-cost imports, particularly from China, which producers claim have made it difficult for domestic plants to compete.
Domestic Capacity vs. Import Competition
Industry data shows that India has a domestic production capacity of roughly 30,000 tonnes for these specialized solar components. With annual domestic demand estimated between 25,000 and 28,000 tonnes, the industry has the capacity to be self-sufficient. However, producers report that their factories are often running below full capacity because downstream solar module manufacturers continue to prioritize cheaper imported supplies. By raising the barrier against these imports, the association believes domestic plants can achieve higher utilization rates.
Managing Working Capital Stress
Beyond import duties, copper producers have also lobbied for a significant reduction in the Goods and Services Tax on copper products, proposing a cut from 18% to 5%. This request is driven by the severe pressure on liquidity caused by global price volatility. With copper prices on the London Metal Exchange hitting record highs—exceeding $14,700 per tonne as of September 2026—the cost of raw materials has surged. A high GST rate blocks a large amount of cash for producers, and the industry argues that a lower rate would help ease this ongoing financial strain.
Potential Impact on Solar Projects
While these measures are intended to support the financial health of primary copper producers, they also present a risk to the broader energy sector. If the government approves the duty hike, the cost of manufacturing solar modules could increase. This creates a potential conflict with the country's push for affordable green energy. Investors should monitor whether the government prioritizes the protection of domestic metal producers or maintains low costs for solar developers.
The next important update for market participants will be the government's official response to these proposals, particularly during upcoming budget planning. Shareholders may also track if there is any movement on the GST reduction, as this would be a direct positive for the cash flow position of domestic copper companies. Any policy shifts will also likely influence the procurement strategies of large solar engineering and construction firms.