India’s Solar Ambitions Face Hurdles Amid Heavy Reliance on Chinese Imports and Domestic Manufacturing Challenges

(Source: Indian Express; Section: Economy; Page: 13)

 Analysis of News:         

Dependence on Chinese Imports

• India’s solar manufacturing is still in its early stages, heavily dependent on imports, particularly from China, which dominates global solar manufacturing.
• In 2023-24, India imported $7 billion worth of solar equipment, with China accounting for 62.6% of this total.
• China controls 97% of the world’s polysilicon production and 80% of solar modules, creating a significant challenge for India in developing a self-sufficient solar manufacturing ecosystem.

Domestic Manufacturing and Challenges

• India has implemented policies like the Production Linked Incentive (PLI) scheme to boost domestic manufacturing, but progress has been limited.
• Currently, 90% of India’s solar manufacturing involves assembling imported modules, with only 15% local value addition.
• India lacks domestic production of key components like polysilicon, solar cells, and aluminum frames.

Need for Self-Reliance in Solar Manufacturing

• To reduce its dependence on imports, India needs to invest in upstream solar production, starting with silica refining and polysilicon production.
• Developing domestic capacity for essential materials like aluminum frames and glass will also require government support and research and development efforts.

Global Context and Recommendations

• China remains the global leader in solar equipment manufacturing, exporting $39.5 billion worth of solar modules in 2023.
• To compete, GTRI recommends that India expand the PLI scheme, invest in skilled labor, and collaborate with countries like the US, EU, and Japan to establish large-scale manufacturing facilities.
• Reducing dependency on China is critical for India to meet its renewable energy goals while ensuring sustainable growth in the solar sector.