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Why India has become a hot solar manufacturing location for Chinese solar giants

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Chinese solar companies entering India

Every major Chinese solar company is trying to establish a beachhead in India with the government increasing its solar capacity target to 100 GW by 2022. Trina Solar, JA Solar have announced big plans to establish solar factories in India. This is not only to take advantage of the “Make In India” theme but also to leverage the higher prices commanded for the reserved portion of the government solar tenders. With the market all set to grow by 4-5 GW in the next few years on an annual basis, having a 500 MW fab is also seen as a good way to build some insurance against any anti-dumping duties imposed by the Indian government. Note the Indian government had come very close to imposing ADD on Chinese solar cell and panel imports a year ago. However that disaster was averted for the Chinese players, but they will still want to be in the good books of the Modi government which wants to promote manufacturing and exports from India.

HK giant Foxconn is also planning to build a module factory in India in its JV with the Bharti and the Softbank group. Chinese solar companies are facing pressures of duties and trade restrictions from different trade blocs such as Europe and USA. They have already started to set up factories in SE Asia in countries like Malaysia, Thailand and Vietnam. Even Taiwanese companies are doing the same to escape the punitive duties being imposed upon them by the USA and European governments. It makes good sense for these companies to set up manufacturing facilities in India.

The main advantages of setting up factories in India for the Chinese are:

  • Presence of a large growing solar market near the factory location which will reduce
  • Insurance from imposition of duties by Indian government on imports
  • Get in the good books of the government by promoting employment and exports
  • Use as an export hub to circumvent duties already imposed by Europe and USA
  • Use incentives given by central and state governments to reduce their costs
PG

Sneha Shah

I am Sneha, the Editor-in-chief for the Blog. We would be glad to receive suggestions, inputs & comments on GWI from you guys to keep it going! You can contact me for consultancy/trade inquires by writing an email to greensneha@yahoo.in

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