From April to August 2016, import and export activity worth $808 million was registered in the Indian solar sector. During the five-month period, India exported solar modules and cells worth $45 million, and imported modules and cells worth $763 million. Compared to the same period in 2015, exports have increased by 66 percent and imports have grown by 53 percent.
China continues to be the single largest exporter of solar modules and cells to India accounting for 85 percent of India’s total solar imports. Malaysia is the second largest exporter to India accounting for a 9 percent share of India’s overall imports. To achieve the target of 100 GW solar by 2022, the scale and rate of installations have been ramped up.
“The present domestic manufacturing capacity is not adequate to cater to the yearly rollout targets,” commented Shri Piyush Goyal, Minister of Power in response to questions from Rajya Sabha.
Cheaper Chinese components have led to the growth in imports.
The United Kingdom is the single largest importer of Indian solar modules and cells, accounting for 36 percent of India’s total solar exports. However, UK solar market is forecast to slowdown going into 2017. Italy accounts for 11 percent of exports, followed closely by China with 10 percent.
“Indian manufacturers are mostly focused on export markets as this helps in increasing their profits. In India, developers are keen on using cheaper modules and cells as they grapple with project viability at aggressive tariffs,” commented an official at India’s Ministry of Commerce. “For Indian manufacturers looking outside, this is the way to earn a profit as scaling up manufacturing to reduce price is a costly affair.” He also said that for exports to grow in volume, India needs to grow its large-scale manufacturing capacity.
“To help the manufacturing sector, the Government is providing support to domestic manufacturers through a provision of reserving some capacities for domestic cells and modules which gives them assured market,” stated Shri Piyush Goyal, Minister of Power, in a written reply to the Rajya Sabha.
According to Mercom’s India Solar Project Tracker, 9.3 GW of solar projects have been installed out of the proposed 100 GW. With another 91.2 GW of solar to be installed by 2022, solar component imports are only going to increase.