India's new government has decided not to slap anti-dumping duties on solar panel imports from the United States, China and other countries, reversing a policy of the previous administration, a minister said Wednesday.

Under the previous left-leaning Congress government, India announced it would impose duties on imported solar panels to shield domestic manufacturers which said their prices were being undercut by foreign rivals.

The order to impose the duties emerged from a government-ordered probe launched in 2011. But the decision needed to be validated by the finance ministry within a certain time-period before it could be implemented.

"There was no notification (of the Congress government's order). We allowed it to lapse," junior finance minister Nirmala Sitharaman told a news conference.

New right-wing Prime Minister Narendra Modi, who took office in late May as head of the Bharatiya Janata Party government, is a strong proponent of solar power and set up various projects when he served earlier as chief minister of the prosperous western state of Gujarat.

Blackouts in India are frequent and solving the country's energy shortage is seen as key to helping power industrial economic growth. In the last few years, India has been flipping the switch on a series of huge new solar energy projects.

Greater economies of scale, better technology and cheap foreign panels that turn sunshine into electricity have hammered down once sky-high solar generation costs to competitive levels.

To build solar plants India has been importing equipment, mainly from China, but also from the United States and Taiwan. Indian companies have insisted that unless imports are curbed, the country will never develop an indigenous solar industry.

Since 2010, India has hiked installed solar power capacity from a meagre 17.8-megawatts to more than 2,600MW, official figures show, as part of the government's aim to make "the sun occupy centre-stage" in the energy mix.

India has set a target of generating 20,000MW of grid-connected solar power and 2,000MW of off-grid generation, such as roof panels, by 2022.

Power Minister Piyush Goyal had said earlier that domestic solar equipment manufacturing capacity of 700-800MW was insufficient to meet the government's ambitious solar energy plans.

There was no immediate reaction available from Indian solar equipment manufacturers, many of which have been closing down in the face of foreign competition.