With the United States set to impose stricter regulations on solar equipment imports from China and Southeast Asian nations, India’s burgeoning solar manufacturing industry is eyeing a “Make in India” and export opportunity in the coming years.
Indian solar exports have grown rapidly over the past two years following U.S. restrictions against China.
In 2023, India’s solar exports soared 227 per cent to USD 1.8 billion from USD 561 million in 2022, with the U.S. accounting for over 97 per cent of the exports.
The U.S. is the world’s second-largest solar market after China, while India ranks third in total installed solar capacity. However, the U.S. relies on imports for over 78 per cent of its solar equipment needs, primarily from China and Southeast Asia.
To boost domestic manufacturing, the Biden administration has taken several measures over the past two years, though U.S. manufacturers still struggle to compete on costs with Chinese rivals.
This week, seven leading U.S. solar companies filed trade complaints seeking tariffs on solar products exported from Southeast Asia to the U.S. In June 2022, the U.S. had allowed a 24-month duty-free window for imports from Cambodia, Malaysia, Thailand, and Vietnam to ensure supply continuity. This window closes in June 2024.
U.S. manufacturers allege Chinese companies have been relocating production to neighbouring countries to circumvent existing tariffs.
In 2023, the U.S. imported USD 12.5 billion worth of solar products, mostly “dumped” at around half the price from Southeast Asian nations.