According to media reports such as The Hindu Daily on March 30th, the Indian Ministry of New and Renewable Energy announced the resumption of import restrictions on solar photovoltaic modules from April 1st. The Indian government's move aims to increase its domestic production capacity. In the previous fiscal year when this restriction was put on hold, India imported a large amount of solar products from countries such as China. Will this measure by the Indian government have an impact on Chinese companies? Can "Made in India" truly develop through such measures? A Global Times reporter conducted an interview on this matter.
Previously put on hold for a year due to insufficient domestic production capacity
On January 2, 2019, the Indian Ministry of New and Renewable Energy issued the Mandatory Registration Order for Certification of Solar Photovoltaic Module Models and Manufacturers (ALMM). ALMM includes List 1 (models and manufacturers of solar photovoltaic modules) and List 2 (models and manufacturers of solar cells). The list of solar photovoltaic modules was released on March 10, 2021. The list of solar cells has not been released yet. Indian government related projects, government funded projects, etc. can only use manufacturers and products listed on the list.
According to the Indian newspaper, being listed is crucial for solar equipment manufacturers to conduct business in India. The products of the companies on the ALMM list can be procured through government supported projects, and the Indian Power Company purchases electricity from these projects. The list released by the Ministry of New and Renewable Energy in March 2021 includes 23 manufacturers. In the past few years, the Indian government has taken a series of measures to reduce imports of solar panels from China. ALMM is one of the measures taken by the government to increase non-tariff barriers on the basis of a 40% tariff on solar module imports.
However, starting from March 10, 2023, ALMM was put on hold for one fiscal year. The Hindu Daily reported that due to the insufficient manufacturing capacity of domestic Indian manufacturers, the product quality is not as good as that of Chinese manufacturers, but the price is higher, and developers are concerned about ALMM. At the same time, the Indian government has also realized that domestic production capacity cannot meet demand, so it has temporarily put ALMM on hold.
Indian manufacturers breathed a sigh of relief
After ALMM was temporarily shelved, India imported a large amount of solar energy products from China and Vietnam. In 2023, the import of solar energy equipment in India has grown rapidly. According to Bloomberg statistics, the import volume of solar panels in India reached its highest level in 18 months in September last year, and the import volume of solar panels in the first nine months of last year was higher than the total of the previous three years. Among them, India is particularly dependent on its geopolitical competitor China. According to reports, since the beginning of 2021, over 57% of India's imported solar products come from China.
According to statistics released by clean energy research firm Mercom, Chinese companies occupy 4 out of the top 5 in the 2022 Indian photovoltaic module market rankings. The data released by the China Chamber of Commerce for Import and Export of Mechanical and Electrical Products recently shows that in 2023, the export value of photovoltaic cells to China was 970 million US dollars, accounting for 24.6% of the total export value of photovoltaic cells; The export value of photovoltaic modules for printing is 2.19 billion US dollars, accounting for 6% of the total export value of photovoltaic modules.
Bloomberg reported that in order to achieve energy self-sufficiency, Indian Prime Minister Modi encouraged local manufacturers to manufacture solar panels. The Economic Times of India believes that the Indian government's restart of ALMM aims to further enhance domestic production capacity. According to insiders, the Indian government believes that domestic production capacity has increased and manufacturers need policy support.
The Indian government's move has breathed a sigh of relief for domestic manufacturers who complain about low prices of imported products. "Due to exemptions, domestic component manufacturers have suffered losses and domestic capacity utilization is insufficient. Now, we expect sales and capacity utilization of (domestic manufacturers) to increase," said Segal, Chairman of the Indian Solar Manufacturers Association
According to foreign media analysis, India's goal is to rapidly increase the proportion of solar power generation in its coal-fired power structure, from around 17% to nearly 39% by 2032. In terms of solar module manufacturing, its goal is to increase production capacity to 100 gigawatts per year by the end of 2026. According to the Indian magazine Energetica, the Ministry of New and Renewable Energy has recently increased the number of producers on the ALMM list to 81 and increased the cumulative component manufacturing capacity to 37421 megawatts.
Chinese manufacturers respond to "Indian market risks"
Bloomberg reported that India's manufacturing capacity for solar products is rapidly improving, but in this industry with rapidly developing technology and constantly fluctuating prices, measures to enhance local manufacturing capabilities have not been successful. The predicament in India highlights China's dominant position in many energy transition technologies. Since the beginning of 2021, about two-thirds of India's solar cells and 100% of its silicon wafers have come from imports, and this proportion is unlikely to decrease in 2024.
A staff member from a large domestic photovoltaic module manufacturer told Global Times reporters that India is one of the most promising and rapidly growing markets in the world, but local trade barriers and risks are also noticed by various manufacturers. The resumption of ALMM is expected, and "everyone is mentally prepared.". The above sources analyzed that in order to support local enterprises, India has imposed tariffs on imported photovoltaic cells and modules since 2022, and has also launched anti-dumping investigations on related components from time to time. Therefore, major domestic photovoltaic manufacturers rarely invest on a large scale in India and mainly sell their products through trade. It is expected that ALMM will not change the situation where "India needs Chinese products".
According to media reports, in June 2022, India decided to impose anti-dumping duties on solar fluorinated backboards originating from or imported from China, except for transparent backboards. In June 2023, India announced an anti-dumping investigation against aluminum frames used for solar panels and components originating or imported from China. The above-mentioned individuals believe that even so, Chinese photovoltaic modules and cells still occupy a large market share in India, which is fundamentally due to India's insufficient production capacity and the production and technological advantages of Chinese enterprises.
Qian Feng, a researcher at the National Institute of Strategic Studies at Tsinghua University and an expert on India, told Global Times on the 1st that India has always hoped to increase its proportion of "Made in India" in various fields such as photovoltaics, but often adopts "distortion measures" that go against market rules. He also mentioned that in terms of trade with China, India occasionally incorporates political factors and attempts to "de risk". Qian Feng said that although India's photovoltaic industry has made progress in recent years, it has not yet reached the level of Chinese enterprises. Measures such as ALMM may support local manufacturers and increase the proportion of "Made in India" in the short term, but in the medium to long term, this is not conducive to India improving production efficiency and achieving its goals in the clean energy sector.
