India’s solar equipment imports may reach $30 billion by 2030

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India’s solar equipment imports may reach $30 billion by 2030

India’s solar equipment imports may reach $30 billion by 2030

Industry News
Oct 22,24

Currently, around 90% of India’s solar manufacturing is limited to assembling modules from imported cells, with only 15% local value addition.

India’s solar equipment imports may reach $30 billion by 2030

India’s solar equipment imports could surge to $30 billion annually by 2030, rising sharply from around $7 billion in the fiscal year ending March 2024, according to a report by the Global Trade Research Initiative (GTRI). Despite efforts to boost domestic manufacturing through production-linked incentives (PLI), a significant portion of imports will likely continue to come from China.

In FY24, 62.6% of India’s solar equipment imports originated from China, with total solar capacity additions reaching 15 gigawatts (GW). To achieve the target of 500 GW of non-fossil fuel-based power capacity by 2030, as committed at COP26, India would need to install 65-70 GW of solar power annually, driving up import volumes proportionately.

“Given India’s limited local manufacturing and dependence on imports, the annual solar import bill could escalate to $30 billion, with most shipments coming from China,” GTRI stated.

Currently, around 90% of India’s solar manufacturing is limited to assembling modules from imported cells, with only 15% local value addition. In FY24, India imported solar cells worth $1.9 billion. Few Indian companies manufacture solar cells using imported polysilicon or wafers, which add 30-40% value locally, and none currently produce cells from raw silica sands.

The PLI scheme aims to enhance domestic manufacturing, but its impact remains constrained by reliance on imported inputs. GTRI noted that China dominates 97% of global polysilicon production and 80% of solar module manufacturing, creating a significant price advantage.

During FY24, China supplied $3.89 billion worth of solar cells and modules to India, making it the largest supplier. Vietnam followed with $1.02 billion (16.5%), Malaysia with $549.8 million (8.9%), and Thailand with $248.8 million (4%). However, many of these countries depend heavily on Chinese components for their exports.

“Building a self-reliant solar manufacturing ecosystem in India will require substantial investment to develop an integrated supply chain, especially for polysilicon and wafer production. Without this, India will struggle to curb its import dependence and meet its renewable energy goals,” the report concluded.

(Decan Herald)