Facing tariff headwinds in the United States, products struggle to compete with Chinese counterparts, and India's solar energy industry is desperately seeking export markets.

【The Global Times report, reporter Xiao Zhendong】Facing the dual pressure of domestic supply-demand mismatch and the United States’ strict tariffs, India’s solar industry is struggling to find new export markets, but due to issues such as insufficient technology, high costs, dependence on supply chains, and inadequate international recognition, the lack of product competitiveness remains a key reality the industry must confront. Japan’s “Nikkei Asia Review” reported on the 3rd that although India’s solar industry is narrowing the gap with its peers in China, Chinese products have dual advantages in both technology and reputation in global markets. The “India Narrative” website commented on the 6th that with tensions in US-India trade relations, India’s ambitions to develop the solar industry have been cast a shadow.

A production workshop at a solar panel manufacturing plant in India. (Visual China)

“Thinking of oneself as a ‘global solar manufacturing hub’”

India’s level of emphasis on developing its solar industry is by no means low. The foundation for the expansion of India’s solar industry lies in the target set by the Indian government to achieve 500 gigawatts of non-fossil fuel power generation capacity by 2030. To achieve its solar industry development goals, the Indian government has rolled out a series of measures to promote the use of solar power, such as the “rooftop solar program,” and encouraged domestic companies to invest in production by offering production-linked incentives and imposing tariffs on imported components.

As a result, in recent years, India’s solar industry manufacturing capacity has expanded rapidly. Pralhad Joshi, India’s Minister of New and Renewable Energy, announced last month that over the past 10 years, India’s solar module manufacturing capacity has risen from 3 gigawatts to 172 gigawatts. Citing a report published in mid-March by an adviser from India’s power sector, Reuters said that India’s solar power generation capacity is expected to increase to four times the current level within the next 10 years. Focusing on environmental politics and development, the Indian media outlet “Down to Earth” reported that the growth in solar panel output has made India a net exporter of solar panels. India’s National Solar Association also recently held an annual roundtable meeting to discuss how to position India as a “global solar manufacturing hub.”

But it is worth noting that the process of exporting India’s solar industry outward is running into strong headwinds. In late February this year, the United States, accounting for nearly 95% of India’s solar module exports, announced anti-dumping preliminary duties of nearly 126% on solar cells and modules produced in India, sharply increasing the pressure on Indian manufacturers to look for new markets. On the 6th, the “India Narrative” website said that the US imposes hefty tariffs on Indian solar cells, effectively limiting Indian products’ access to a globally critical market.

“Indian modules are more expensive, but the technology isn’t as advanced”

As Indian solar manufacturers search for external markets, one of the core issues they have tried to solve has been how to compete with China’s solar industry. Data previously released by the International Energy Agency shows that China controls more than 80% of the global solar industry supply chain.

Recently, India’s solar industry seems to have seen a glimmer of “opportunity.” According to a report by “Nikkei Asia Review,” Indian producers have been trying to narrow the price gap between their solar modules and those produced in China. Data provider EUPD Research shows that in early 2024, Indian-made modules were 9 US cents per watt more expensive than Chinese modules; by the late March this year, the price gap had narrowed to 5.4 US cents per watt. Starting April 1, China’s policy canceling VAT export tax rebates for photovoltaic products officially took effect. EUPD Research believes this is expected to further narrow India’s price disadvantage.

However, citing experts, “Nikkei Asia Review” said that in order to win markets in the Middle East, Asia, and Africa, Indian products need to further compress costs to about half of the current level to have a chance, which would take at least three years. More importantly, even if Indian factories complete the “cost challenge,” expanding the scale of domestic solar cell manufacturing and integrating supply chains is not easy.

Solar cells are made by processing silicon wafers; after multiple solar cells are encapsulated and connected, they are assembled into solar modules capable of generating electricity for external use. Zhou Chengxiong, a research fellow at the Institute of Technology Strategy Consulting and Research under the Chinese Academy of Sciences, told a reporter from The Global Times on the 6th that India’s solar industry relies heavily on China. India’s domestic capacity is mainly concentrated in module encapsulation, similar to an “assembly workshop.” Almost all silicon wafers, cell wafers, and production equipment are imported from China. But India, to protect its domestic industry, imposes high tariffs on imports from China, making its cell production costs higher than China’s. This has effectively undermined the competitiveness of Indian products internationally. EUPD Research said that compared with China, India’s power, financing, and raw material costs are also higher. In addition, according to data from research firm Wood Mackenzie, average R&D spending by Chinese solar manufacturers is about 4%, while Indian companies spend less than 1%, which makes Indian manufacturers’ efficiency lower by 1.5%, requiring more modules to produce the same product output. Yana Herishko, head of solar supply chain research at Wood Mackenzie, said bluntly: “Indian modules are more expensive, but the technology isn’t as advanced.”

Could this Middle East conflict become an opportunity?

“India is at a critical crossroads—where it needs to balance economic growth, job creation, and environmental sustainability.” India’s “New Delhi Television” reported on the 5th that in recent years, India has been pushing development in its domestic renewable energy sector, attempting to shift its energy mix. India’s renewable energy sector includes solar, wind, hydropower, and bioenergy. Official data show that India’s installed capacity of renewable energy increased from 76.37 gigawatts in March 2014 to 233.99 gigawatts in June 2025, nearly tripling.

The development of related manufacturing industries for renewable energy in India seems to be encountering a “window of opportunity”—the ongoing Middle East conflict has caused an energy crisis on a global scale, and countries are paying increasing attention to capacity-building for renewable energy. However, India’s domestic industrial development appears difficult to resonate with international demand. EUPD Research senior adviser Rajan Kalsotra said that while prices are falling, the industry’s focus is shifting toward other non-cost factors, such as sustainability and reliability. Kalsotra believes that although the world is paying more attention to renewable energy, even if construction speeds up, Indian manufacturers are unlikely to benefit from it; their products are still far from world-class competitiveness, and there remains a considerable development stage ahead that they need to overcome.