Is China a threat to India's solar manufacturing industry?
What's the story
China's recent move to propose export controls on key solar technologies could impact India's plans for a self-sufficient solar manufacturing supply chain. The Chinese Ministry of Commerce has proposed restrictions on 12 advanced technologies used in solar manufacturing, including partial restrictions on popular cell technologies and complete bans on advanced equipment for critical upstream components like wafers and polysilicon. The proposal is currently open for industry consultation.
Industry concerns
Concerns about long-term impact on localization goals
While an immediate disruption to module production is not expected, industry players have raised concerns about the long-term impact of these export controls.
They say that China's dominance in equipment and machinery could affect India's capacity additions and localization goals.
Vinay Rastogi, CBO & Director at Premier Energies, said that while existing businesses won't be affected by these restrictions, newer technologies could face stricter curbs as they become commercially viable.
Manufacturing challenges
Challenges for Indian manufacturers in upstream segments
The export controls could pose a challenge for Indian module manufacturers looking to venture into upstream segments such as cells, ingots, wafers, and polysilicon.
China has a near-monopoly over ingot production in terms of both the final product and the equipment used for its production.
However, there are non-Chinese suppliers for cells, wafers, and polysilicon.
Manufacturing shift
Potential for non-Chinese suppliers to step in
Interestingly, many global equipment suppliers who have the technology still manufacture in China.
This means that export restrictions from China could force them to create a manufacturing ecosystem in other countries like India.
Amit Manohar, Secretary General of ISMA, stressed that countries such as Germany, Japan, Taiwan, South Korea, and the US have valuable expertise in equipment and materials and advanced cell processes.
Standards compliance
Impact on India's domestic manufacturing deadline
Earlier this year, the Ministry of New and Renewable Energy (MNRE) had expanded mandatory sourcing requirements from the Approved List of Models and Manufacturers to include ingots and wafers.
This means all solar projects in India from February 2028 must meet these domestic manufacturing standards.
However, it is still unclear how an export ban from China will affect this deadline for domestic ingot and wafer requirements.