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HomeNewsIndia's Domestic Solar Panel Industry Struggles Amidst Influx of Cheaper Chinese Imports

India’s Domestic Solar Panel Industry Struggles Amidst Influx of Cheaper Chinese Imports

Despite India’s efforts to promote self-reliance through initiatives like Make in India and Aatmanirbhar Bharat, the domestic solar panel manufacturing sector is facing significant challenges due to the influx of inexpensive imports from China.

(ALMM)

Despite imposing a 40% import duty, Chinese solar panels remain cheaper, primarily due to special incentives provided by China to boost exports to India. This trend has severely impacted domestic manufacturers, leading to financial losses and reduced capacity utilisation levels. The suspension of the Approved List for Models and Manufacturers (ALMM) Order for Solar Photovoltaic Modules in FY’24 further exacerbated the situation. This decision, aimed at alleviating the shortage of domestic solar panel supply, allowed unchecked imports to flood the market. The Ministry of New and Renewable Energy is set to review the suspension before April 1, with indications that existing government-approved solar projects will be exempt from the ALMM Order.

An industry expert highlights the detrimental effects of relying on Chinese imports, emphasising the lack of quality control and warranty assurances associated with these products. Despite the cost savings, the risk of operational failures poses significant financial risks to consumers. The domestic solar panel industry’s capacity utilisation has plummeted to 30-35% due to the surge in Chinese imports. To sustain operations, many manufacturers have turned to export markets, with substantial shipments made to countries like the US. However, this reliance on exports underscores the industry’s vulnerability to global market fluctuations. The regulatory landscape surrounding solar module imports has also contributed to the industry’s challenges. The delay in implementing ALMM and BIS Certification Type 2 approval has allowed unregulated imports from countries like China and Vietnam, further undermining domestic production. India’s ambitious plans to install 280 GW of solar power by 2030 face significant hurdles as the domestic industry struggles to compete with uncertified imports. With over 20 GW of production capacity awaiting ALMM approval, the government must take decisive action to safeguard the interests of domestic manufacturers and promote sustainable growth in the solar energy sector.

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