China the biggest Beneficiary of Solar Boom in India

In continuation of our last Monday’s story “Can Indian Solar Panel Companies Take Advantage of the Solar Boom in India”, there is a recent study by Mercom Consulting reported that China is the largest exporter of solar equipment in India. China accounts for 87% of the market share of solar equipment in India.

Currently, India imports 35 times more solar components, than its exports. According to the report, India imported solar equipment worth $2.17 billion between April 2016 and January 2017 while its exports stood at $60.3 million. These imports increased by a whopping 39% when compared to the same period in the previous year. China is the biggest exporter at $1.9 billion followed by Malaysia at $170 million.

China Biggest Exporter of Solar Equipment to India

China has been a multi-bagger of the boom in the solar industry. The country has been benefitted greatly owing to its economies of scale and cheap prices. Though India has set up a massive target of installing 100 GW of solar power by 2022, the country still lacks a decent polysilicon manufacturing unit which is the basic raw material for a solar cell (solar wafer). This makes India import solar cells and wafers from China. China owing to its close proximity to India and cheap prices have become the one-stop shop for the solar industry in India.

As explained in the last week’s article, India lacks the sufficient amount of R&D, specialization and differentiation. The country needs to heavily invest in technology if it wants to take advantage of the boom in the Indian solar market. Not only solar cells the country also import huge volumes of solar panels. Though the government tried to save the local manufacturers through the Domestic Content Requirement (DCR), the efforts went in vain as the WTO ruled this practice as unfair.

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India has a huge population base and a rising level of unemployment. Though the country houses the brightest of minds, the industries need to sit down and think about their strategies to employ these minds. Lack of industrialization and proper government policies and regulations is cutting down the future of our nation. The only way to take advantage of the solar boom in the country is through a meaningful collaboration between the government and the industries. Not only will it increase the manufacturing base in India, cut down the imports but also provide jobs to the large unemployed population in India.