Facing tariff headwinds in the United States, products struggle to compete with Chinese counterparts, and India's solar energy industry is desperately seeking export markets.

Source: Global

[Global Times report by reporter Xiao Zhendong] Faced with the dual pressures of domestic supply-demand mismatch and the United States’ stringent tariffs, India’s solar power industry is struggling to find new export markets, but the lack of competitiveness in its products—due to issues such as technology, cost, supply-chain dependence, and insufficient international recognition—remains a key reality the industry must confront. A report from Japan’s Nikkei Asia Review on the 3rd says that although India’s solar industry is narrowing the gap with its peers in China, Chinese products have both technological and reputational advantages in global markets. The “India Narrative” website, in a comment posted on the 6th, said that the tense trade situation between India and the U.S. has cast a shadow over India’s ambitions to develop its solar industry.

To Become a “Global Solar Manufacturing Center”

It is hard to overstate how much importance India attaches to developing its solar industry. The foundation for the expansion of India’s solar industry lies in the target set by the Indian government to achieve 500 gigawatts of non-fossil fuel power generation capacity by 2030. To achieve its solar industry development goals, the Indian government has rolled out a series of measures such as the “Rooftop Solar Program” to promote solar power use, and encouraged domestic companies to invest in production through mechanisms like production-linked incentive schemes and tariffs imposed on imported components.

As a result, in recent years, India’s solar industry has seen its manufacturing capacity expand rapidly. Pralhadh Joshi, India’s minister for new and renewable energy, announced last month that over the past 10 years, India’s solar module manufacturing capacity has risen from 3 gigawatts to 172 gigawatts. A report published in mid-March by a consultant in India’s power sector, as cited by Reuters, said India’s solar power generation capacity is expected to increase to four times the current level over the next 10 years. Indian media outlet “Down to Earth,” which focuses on environmental politics and development, reported that the growth in solar module output has made India a net exporter of solar modules. India’s National Solar Association also recently held an annual roundtable to discuss how to position India as a “global solar manufacturing center.”

But it is worth noting that India’s progress in exporting its solar industry outward is running into strong headwinds. In late February this year, the United States, which accounts for nearly 95% of India’s solar module exports, announced preliminary anti-dumping duties of nearly 126% on Indian-made solar cells and modules, sharply increasing pressure on Indian manufacturers to search for new markets. The “India Narrative” website said on the 6th that the U.S. has imposed high tariffs on India’s solar cells, effectively limiting Indian products’ entry into a globally crucial market.

“Indian modules are more expensive, but the technology isn’t that advanced”

In the process of Indian solar manufacturers looking for external markets, competing with China’s solar industry has always been one of the core problems it has been trying to solve. Earlier, data released by the International Energy Agency showed that China controls more than 80% of the global solar industry supply chain.

Recently, India’s solar industry seems to have caught sight of a sliver of “opportunity.” According to a report by Nikkei Asia Review, Indian producers have been trying to narrow the price gap between their solar modules and those made in China. Data provider EUPD Research shows that in early 2024, Indian-made modules were 9 U.S. cents per watt more expensive than Chinese modules; by late March of this year, the price gap had narrowed to 5.4 U.S. cents per watt. Starting April 1, China’s policy to cancel VAT export tax rebates for photovoltaic products took effect officially. EUPD Research believes this will further narrow India’s price disadvantage.

However, citing experts, Nikkei Asia Review said that to win markets in the Middle East, Asia, and Africa, Indian products need to further compress costs to about half of their current level before they have a chance—and this would take at least three years. More importantly, even if Indian manufacturers complete the “cost challenge,” expanding the scale of domestic solar cell manufacturing and integrating the supply chain is far from easy.

Solar cells are made from processed silicon wafers; after multiple solar cells are encapsulated and connected, they are assembled into solar modules capable of power generation for external use. Zhou Chengxiong, a researcher at the Institute for Science and Technology Strategy Consulting under the Chinese Academy of Sciences, said in an interview with a reporter from the Global Times on the 6th that India’s solar industry is highly dependent on China. India’s domestic production capacity is mainly concentrated in module encapsulation, similar to an “assembly workshop.” Silicon wafers, cell wafers, and production equipment are almost all imported from China. But to protect its domestic industry, India imposes higher tariffs on imports from China, which makes its battery production costs higher than China’s. This, in practice, undermines the international competitiveness of Indian products. EUPD Research said that compared with China, India also faces higher electricity, financing, and raw material costs. In addition, according to data from research firm Wood Mackenzie, Chinese solar manufacturers’ average R&D spending is about 4%, while Indian companies are below 1%, which makes Indian manufacturers’ efficiency lower by 1.5%, requiring more modules to produce the same product. Yana Herishko, head of solar supply chain research at Wood Mackenzie, said bluntly, “Indian modules are more expensive, but the technology isn’t that advanced.”

Could this Middle East conflict become an opportunity?

“India is at a critical crossroads—needing to strike a balance between economic growth, job creation, and environmental sustainability.” A report from India’s “New Delhi Television” on the 5th said that in recent years, India has been pushing the development of its domestic renewable energy sector, attempting to shift its energy structure. India’s renewable energy sector includes solar, wind, hydropower, and bioenergy. Official data shows that India’s installed capacity in renewable energy grew from 76.37 gigawatts in March 2014 to 233.99 gigawatts by June 2025, nearly tripling.

The development of manufacturing industries related to renewable energy within India seems to have entered a “window of opportunity”—the ongoing Middle East conflict has created an energy crisis on a global scale, and countries are paying increasing attention to building renewable energy production capacity. However, India’s domestic industrial development appears difficult to align with international demand. Rajan Kalsotera, a senior advisor at EUPD Research, said that while prices are falling, the industry’s focus is shifting to other non-cost factors, such as sustainability and reliability. Kalsotera believes that although the world is focusing more on renewable energy at present, even if construction speeds up, Indian manufacturers are unlikely to benefit from it. Their products are still far from world-class competitiveness, and there is still a considerable development phase ahead that they need to get through.

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