India's solar energy industry struggles to find export markets

Our reporter Xiao Zhendong

Facing the dual pressures of domestic supply and demand mismatch and strict U.S. tariffs, India’s solar energy industry is struggling to find new export markets. However, due to issues such as technology, costs, supply chain dependence, and insufficient international recognition, product competitiveness remains a key challenge the industry must confront. According to a report by Japan’s Nikkei Asia Review on the 3rd, although India’s solar industry is narrowing the gap with Chinese peers, Chinese products still hold the dual advantages of technology and reputation in the global market. The website “India Narrative” commented on the 6th that tense trade relations between India and the U.S. cast a shadow over India’s ambitions to develop its solar industry.

Aspiring to be a “Global Solar Manufacturing Hub”

India’s emphasis on developing its solar industry is quite high. The foundation for India’s solar industry expansion lies in the government’s goal to achieve 500 gigawatts of non-fossil fuel power generation capacity by 2030. To reach this development target, the Indian government has launched a series of measures such as the “Rooftop Solar Program” to promote solar energy use, and has encouraged domestic companies to invest in production through production-linked incentives and tariffs on imported components.

As a result, India’s manufacturing capacity in solar energy has rapidly expanded in recent years. Pralhad Joshi, India’s Minister of New and Renewable Energy, announced last month that over the past decade, India’s solar module manufacturing capacity has increased from 3 GW to 172 GW. Reuters, citing a report released in mid-March by an advisor to India’s power sector, stated that India’s solar power capacity is expected to increase fourfold over the next ten years. The environmentally focused Indian media outlet “Down to Earth” reported that the growth in solar module output has made India a net exporter of solar modules. Recently, the Indian National Solar Federation held its annual roundtable to discuss how to position India as a “Global Solar Manufacturing Center.”

However, it is worth noting that India’s export process in the solar industry is facing strong headwinds. In late February, the U.S., 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 find new markets. The website “India Narrative” on the 6th stated that the U.S. Department of Commerce’s high tariffs on Indian solar cells effectively restrict Indian products from entering a key global market.

“Indian components are more expensive, but not as advanced in technology”

In the process of Indian solar manufacturers seeking external markets, how to compete with China’s solar industry has been one of their core issues. Data previously released by the International Energy Agency shows that China controls over 80% of the global solar supply chain.

Recently, the Indian solar industry seems to see a glimmer of “opportunity.” According to Nikkei Asia Review, Indian producers have been trying to narrow the price gap with Chinese solar modules. German data provider EUPD Research shows that at the beginning of 2024, Indian-made modules are 9 cents more expensive per watt than Chinese modules, but by late March this gap had narrowed to 5.4 cents per watt. Starting April 1, China’s photovoltaic products’ export VAT rebate policy was officially canceled, and EUPD Research believes this will further reduce India’s price disadvantage.

However, the Nikkei Asia Review quoted experts as saying that to win markets in the Middle East, Asia, and Africa, Indian products need to further cut costs by about half, which would take at least three years. More importantly, even if Indian manufacturers overcome the “cost challenge,” expanding domestic solar cell production and integrating supply chains are not easy tasks.

Solar cells are made from silicon wafers, and multiple solar cells are encapsulated and connected to form solar modules capable of generating electricity externally. Zhou Chengxiong, a researcher at the Chinese Academy of Sciences’ Institute of Science and Technology Strategy Consulting, told Global Times that India’s solar industry is highly dependent on China, with most domestic capacity concentrated in module assembly, similar to an “assembly workshop.” Almost all silicon wafers, cells, and manufacturing equipment are imported from China. But to protect domestic industries, India has imposed high tariffs on Chinese imports, raising the cost of its own cell production compared to China. This effectively undermines India’s product competitiveness internationally. EUPD Research also states that compared to China, India’s electricity, financing, and raw material costs are higher. Additionally, according to Wood Mackenzie, Chinese solar manufacturers spend about 4% on R&D, while Indian companies spend less than 1%, making Indian manufacturers 1.5 times less efficient, requiring more components to produce the same output. Yana Hrishko, head of solar supply chain research at Wood Mackenzie, bluntly said, “Indian modules are more expensive, but not as advanced in technology.”

Will the Middle East conflict become an opportunity?

“India is at a critical crossroads—needing to balance economic growth, job creation, and environmental sustainability,” reported India’s “NDTV” on the 5th. In recent years, India has been promoting the development of its domestic renewable energy sector, attempting to transform its energy structure. India’s renewable energy sector includes solar, wind, hydro, and bioenergy. Official data shows that India’s installed renewable energy capacity grew from 76.37 GW in March 2014 to 233.99 GW in June 2025, nearly tripling.

The development of India’s domestic renewable energy manufacturing industry seems to be entering a “period of opportunity”—the ongoing Middle East conflicts have caused a global energy crisis, prompting countries to focus more on expanding renewable energy capacity. However, India’s industry development appears to struggle to resonate with international demand. Rajan Kalsotra, 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. Kalsotra believes that although countries worldwide are increasingly paying attention to renewable energy, even with accelerated construction, Indian manufacturers are unlikely to benefit significantly; their products still have a long way to go before reaching global competitiveness.