With the US set to tighten import norms on solar equipment from China and Southeast Asian countries, the developing Indian solar equipment industry sees it as a 'Make In India' and export opportunity unfolding in the coming years.
Indian solar exports have been growing in the past two years, following the US restrictions against China. India's solar exports rose 227% to $1.8 billion in 2023 from $561 million in 2022. The US accounted for over 97% of Indian exports and the rest were from Indonesia and a couple of African countries. The US imported over 50 GW of solar equipment last year, almost double from the previous year.
The US is the second largest solar market globally after China. India is currently at the third position in terms of total installed solar capacity. The US is dependent on imports for over 78 per cent of its solar equipment needs from China and the South East. The Joe Biden administration in the last two years has taken several measures to help the US develop an end-to-end domestic solar equipment manufacturing industry, which is now not cost-competitive vis a vis Chinese manufacturers.
This week, a group of seven leading US solar manufacturers filed trade complaints with the Biden administration to impose tariffs on solar products being exported from Southeast Asia into the United States. In June 2022, after China and Taiwan imports were restricted with anti-dumping duties and anti-circumvention duties, the US Department of Commerce allowed 24 months of duty-free access to solar cells and modules from Cambodia, Malaysia, Thailand, and Vietnam to ensure supplies and projects were not affected. That two-year window ends in June 2024.
US manufacturers complain that Chinese companies have been relocating production to neighbouring countries to avoid existing tariffs. More restrictions are required to protect US interests, say the US companies. In 2023, the United States imported $12.5 billion worth of solar products, mostly dumped at about half the prices from the South East nations.
''This is going to be an opportunity for the Indian industry since we are going to have significant capacities within 1-2 years and are in a position to compete with China on prices and technologies'', Gyanesh Chaudhary, Chairman and Managing Director of Vikram Solar, one of India's leading manufacturers of solar equipment, tells Fortune India. Half of Vikram Solar's production was exported last year and is planning to set up production units in the US in a joint venture.
India, which was dependent on China and Southeast nations for nearly 90% of the solar photovoltaic cells and modules due to a lack of domestic manufacturing capacities until 3-4 years ago, is now creating big capacities. India's cumulative solar module manufacturing capacity has reached 5.8GW and solar cell manufacturing capacity has reached 64.5 GW by the end of December 2023. India's module manufacturing capacity is expected to exceed 150 GW and cell capacity to reach over 75 GW by 2026.
To boost domestic manufacturing, the Government launched Production Linked Incentive (PLI) in two tranches with an outlay of ₹24,000 crore and under the scheme, 48.3 GW of fully or partially integrated solar PV module manufacturing capacity is coming up in the country.
Leave a Comment
Your email address will not be published. Required field are marked*