Wed. Oct 4th, 2023
    The Rise of India’s Domestic Solar Industry: A Shift Away from Chinese Imports

    India’s reliance on Chinese imports for solar panels has seen a significant decline in recent years. While China’s solar panel exports have increased, India’s imports have dropped by 76% in the first half of this year. This shift can be attributed to India’s focus on its domestic solar manufacturing industry under the ‘Make in India’ initiative.

    To fulfill its commitments under the Paris Climate Treaty, India has been investing in its solar industry, supported by robust demand and government policies. One contributing factor to the decline in imports is the imposition of higher customs duties on solar modules and cells in April 2022. The 40% customs duty on modules and 25% customs duty on cells have made imports more expensive, encouraging domestic manufacturing.

    Furthermore, the Ministry of New and Renewable Energy introduced an Approved List of Models and Manufacturers (ALMM), which made it compulsory to purchase solar modules from approved Indian manufacturers. This has given a significant boost to Indian solar companies but limited the market for Chinese firms that are not on the approved list. While the ALMM has been temporarily suspended until March 2024 to avoid supply-demand imbalances, it has already established Indian suppliers as dominant players in government-funded solar projects.

    In addition to these measures, the Indian government’s Production Linked Incentive (PLI) schemes have successfully encouraged domestic manufacturing and increased sales volumes of local firms. The solar PLI scheme aims to create 48 GW of module manufacturing capacity within India by 2026. In particular, companies like Tata Power Solar, a subsidiary of the Tata Group, have been benefiting from the solar boom with their expertise in solar energy services and the production of solar modules and cells.

    Overall, India’s push for self-sufficiency in the solar industry has led to a decline in Chinese imports. With government support, the Indian solar ecosystem is expected to continue thriving, creating a resilient and competitive domestic market.

    – Solar industry think tank report