India’s solar equipment import bill could reach $30 billion annually to meet the target of installing 500 GW of renewable energy by 2030, increasing reliance on Chinese goods, according to a GTRI report.
The report states India needs significant investment to build a self-reliant solar manufacturing industry, particularly in polysilicon and wafer production.
In 2023-24, India imported $7 billion worth of solar equipment, with China supplying 62.6 per cent. These imports helped install 15 GW of solar capacity, raising the total to 90.8 GW by September, up from just 2.8 GW in 2014.
To meet its 2030 target, India must increase annual installations to 65-70 GW, with over 80 per cent expected to come from solar power. However, this goal appears challenging due to the country’s reliance on imports, which could push annual solar imports to $30 billion.
China remains India’s top supplier of solar cells and modules, providing $3.89 billion worth of imports (62.6 per cent). Vietnam, Malaysia, and Thailand follow, supplying smaller shares of the total.
India has imposed a 40 per cent customs duty on solar modules and 25 per cent on solar cells to reduce dependence on Chinese imports. However, Vietnam, Malaysia, and Thailand are exempt from these tariffs under the India-ASEAN Free Trade Agreement if they add at least 35 per cent value to their exports.
China currently dominates 97 per cent of global polysilicon production and 80 per cent of solar module manufacturing, making competition difficult due to lower prices. In 2023, China exported 227 GW of solar modules worth $39.5 billion and 38 GW of solar cells worth $4.2 billion.
GTRI Founder Ajay Srivastava said that while production-linked incentive (PLI) schemes aim to boost local manufacturing, their impact remains limited as India depends heavily on imported inputs.
Most Indian solar projects rely on imported ready-to-use modules, as local solar manufacturing is still in its early stages. In the last fiscal year, India imported $4.4 billion worth of ready-to-use solar modules, $1.9 billion worth of solar cells, and $1 billion in key components like inverters, cables, and junction boxes.
The report further states that India’s solar manufacturing mostly involves assembling imported solar cells into modules, with just 15 per cent local value addition. Only a few Indian companies produce commercial-scale solar cells using imported polysilicon or wafers, adding 30-40 per cent value locally, and none manufacture solar cells from scratch using silica sand.
The report recommends steps to boost domestic manufacturing, including investing in upstream solar production and decreasing reliance on imported polysilicon and solar cells. India should also build local production capacity for aluminum frames, glass, and other critical materials.
It suggests expanding the PLI scheme to cover early-stage solar manufacturing and providing subsidies to attract private investment. Additionally, it highlights the need for a skilled workforce to manage large-scale solar installations and manufacturing.
Srivastava urged India to partner with the US, EU, and Japan to establish large-scale solar manufacturing facilities. He also recommended reassessing import duties to promote local production without raising costs for consumers.
The report states India needs significant investment to build a self-reliant solar manufacturing industry, particularly in polysilicon and wafer production.
In 2023-24, India imported $7 billion worth of solar equipment, with China supplying 62.6 per cent. These imports helped install 15 GW of solar capacity, raising the total to 90.8 GW by September, up from just 2.8 GW in 2014.
To meet its 2030 target, India must increase annual installations to 65-70 GW, with over 80 per cent expected to come from solar power. However, this goal appears challenging due to the country’s reliance on imports, which could push annual solar imports to $30 billion.
China remains India’s top supplier of solar cells and modules, providing $3.89 billion worth of imports (62.6 per cent). Vietnam, Malaysia, and Thailand follow, supplying smaller shares of the total.
India has imposed a 40 per cent customs duty on solar modules and 25 per cent on solar cells to reduce dependence on Chinese imports. However, Vietnam, Malaysia, and Thailand are exempt from these tariffs under the India-ASEAN Free Trade Agreement if they add at least 35 per cent value to their exports.
China currently dominates 97 per cent of global polysilicon production and 80 per cent of solar module manufacturing, making competition difficult due to lower prices. In 2023, China exported 227 GW of solar modules worth $39.5 billion and 38 GW of solar cells worth $4.2 billion.
GTRI Founder Ajay Srivastava said that while production-linked incentive (PLI) schemes aim to boost local manufacturing, their impact remains limited as India depends heavily on imported inputs.
Most Indian solar projects rely on imported ready-to-use modules, as local solar manufacturing is still in its early stages. In the last fiscal year, India imported $4.4 billion worth of ready-to-use solar modules, $1.9 billion worth of solar cells, and $1 billion in key components like inverters, cables, and junction boxes.
The report further states that India’s solar manufacturing mostly involves assembling imported solar cells into modules, with just 15 per cent local value addition. Only a few Indian companies produce commercial-scale solar cells using imported polysilicon or wafers, adding 30-40 per cent value locally, and none manufacture solar cells from scratch using silica sand.
The report recommends steps to boost domestic manufacturing, including investing in upstream solar production and decreasing reliance on imported polysilicon and solar cells. India should also build local production capacity for aluminum frames, glass, and other critical materials.
It suggests expanding the PLI scheme to cover early-stage solar manufacturing and providing subsidies to attract private investment. Additionally, it highlights the need for a skilled workforce to manage large-scale solar installations and manufacturing.
Srivastava urged India to partner with the US, EU, and Japan to establish large-scale solar manufacturing facilities. He also recommended reassessing import duties to promote local production without raising costs for consumers.
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