According to the Financial Times, as the U.S. intensifies pressure on Chinese manufacturers, Indian companies are attempting to fill the market gap left by U.S. restrictions on Chinese solar exports. However, India’s growing reliance on China for trade and technology is making Chinese manufacturing even more indispensable. At the same time, U.S. tariff policies have failed to attract Indian manufacturers to invest in the U.S. market, resulting in an awkward situation.
Washington’s ongoing push for protectionism includes a recent proposal to impose high tariffs on solar products exported from four Southeast Asian countries, primarily targeting Chinese firms. This behavior disrupts the trade market, forcing manufacturers to shift focus to other markets that are not subject to tariffs. Wood Mackenzie predicts that India will account for 40% of new capacity in battery manufacturing over the next few years.
Last year, the U.S. imported over $1.8 billion worth of solar panels and components from India, indicating a rise in export demand. The CEO of the Indian National Solar Association stated that Indian modular manufacturers are considering export opportunities.
Despite India’s efforts to become a substitute for Chinese products, it continues to face economic challenges and increasing dependence on China. The Wall Street Journal noted that while India accelerates solar product exports, a significant portion of the components it needs is still sourced from China. The Indian government’s “self-reliance” strategy has ironically deepened its reliance on foreign technology.
Many analysts argue that India needs to maintain its relationship with China to reduce dependence. The Indian industry is calling for the easing of visa restrictions for Chinese technicians and suggesting a relaxation of investment limits from China.
The Washington Post believes this dynamic challenges U.S. policymakers’ efforts to diversify supply chains. Despite a range of measures to restrict Chinese solar products, imports of solar panels to the U.S. have reached record highs.
Analyst Paul Liskano asserts that tariff policies have failed to work, and the Biden administration’s subsidies have not attracted Indian manufacturers to invest. Industry concerns remain that plans to build duty-free markets could jeopardize future investments in these countries.
Hopper, president of the American Solar Industry Association, stated that tariff measures alone cannot resolve market challenges, emphasizing the need for effective solutions to support U.S. solar manufacturers.
