(Yicai Global) Jan. 9 -- The Indian government is considering levying a 7.5 percent tax on imports of photovoltaic modules, which could lead to a significant increase in costs for China's solar panel makers, Changjiang Times reported yesterday.

India's solar energy industry relies heavily on imported PV modules, of which about 85 percent are from China. Although not taxed at present, new rules could lead their reclassification as electric motors with import duties.

This proposed tax is part of the country's USD 1.7 billion solar manufacturing plan, aimed at boosting domestic production, and would apply to future bidding on PV projects. Those contracts that have already received authorization would be exempt.

The changes would be a blow for developers of low-bid projects. These firms have already seen higher component costs raising bid rates, and import duties would further drive up charges incurred.