India's solar exports struggle even as price gap with China narrows - Nikkei Asia
Published May 26, 2026
India's Solar Exports Face Challenges Despite Narrowing Price Gap with China
India's solar industry is encountering significant hurdles in its export endeavors, even as the price disparity with Chinese solar products continues to diminish. The Indian solar sector, which has been rapidly expanding, is now at a crossroads, facing the dual challenges of global competition and domestic market dynamics.
According to recent reports, India's solar exports reached approximately $1.5 billion in the fiscal year 2022, which reflects a modest growth compared to previous years. However, this figure is still significantly lower than the potential market share that could be captured by Indian manufacturers. The Indian government has set ambitious targets for renewable energy, aiming to achieve 500 GW of non-fossil fuel-based capacity by 2030. This goal underscores the importance of not only expanding domestic production but also enhancing export capabilities.
Price Competitiveness and Market Dynamics
The price gap between Indian and Chinese solar products has been narrowing, with Indian manufacturers increasingly able to offer competitive pricing. As of late 2022, the average price of solar panels in India was reported to be around $0.30 per watt, while Chinese manufacturers offered panels at approximately $0.26 per watt. This reduction in the price difference is a positive sign for Indian manufacturers as they seek to increase their foothold in international markets.
However, despite the narrowing price gap, Indian solar exports continue to lag behind those of China, which dominates the global solar market with a share of over 70%. The Chinese solar industry benefits from economies of scale, advanced technology, and substantial government support, which allows it to maintain competitive pricing and high production volumes.
Government Initiatives and Policy Support
The Indian government has implemented several initiatives aimed at bolstering the solar manufacturing sector. The Production-Linked Incentive (PLI) scheme, introduced in 2021, is designed to incentivize domestic production of solar cells and modules. Under this scheme, the government has allocated approximately $2.4 billion to encourage manufacturers to increase their production capacities and enhance technological advancements.
Additionally, the Indian government has imposed tariffs on imported solar modules and cells to protect domestic manufacturers from foreign competition. These tariffs are intended to level the playing field and encourage local production. However, the effectiveness of these measures in boosting exports remains to be seen, as manufacturers still face challenges related to supply chain disruptions and high input costs.
Challenges in Scaling Production
One of the primary challenges facing Indian solar manufacturers is the limited availability of raw materials. The production of solar panels requires a variety of components, including polysilicon, glass, and aluminum. India currently relies heavily on imports for these materials, particularly polysilicon, which is a critical input for solar cell production. This dependency on foreign suppliers can lead to vulnerabilities in the supply chain and affect the overall competitiveness of Indian solar products.
Moreover, the manufacturing process for solar panels is capital-intensive, requiring significant investment in technology and infrastructure. Many Indian manufacturers are still in the process of scaling up their operations to meet both domestic and international demand. This scaling process can be slow and fraught with challenges, including securing financing, navigating regulatory hurdles, and addressing labor shortages.
International Market Opportunities
Despite these challenges, there are significant opportunities for Indian solar manufacturers in international markets. The global demand for renewable energy continues to rise, driven by increasing awareness of climate change and the need for sustainable energy solutions. Countries around the world are investing heavily in solar energy to meet their renewable energy targets, creating a favorable environment for Indian exports.
In particular, markets in Southeast Asia, the Middle East, and Africa present promising opportunities for Indian solar products. These regions are experiencing rapid growth in solar energy deployment and are actively seeking reliable suppliers. Indian manufacturers have the potential to capitalize on this demand by leveraging their competitive pricing and improving product quality.
Quality and Innovation as Key Factors
To successfully compete in the global market, Indian solar manufacturers must focus on enhancing the quality of their products and investing in innovation. While price competitiveness is essential, quality remains a crucial factor for international buyers. Indian manufacturers are increasingly adopting advanced technologies and quality control measures to ensure that their products meet international standards.
Additionally, innovation in product design and manufacturing processes can help Indian companies differentiate themselves from competitors. Investing in research and development to create more efficient solar panels and exploring new technologies, such as bifacial panels and energy storage solutions, can provide a competitive edge in the global market.
Conclusion
The Indian solar industry stands at a pivotal moment, with both challenges and opportunities shaping its future. While the narrowing price gap with China is a positive development, the industry must address critical issues related to production capacity, supply chain vulnerabilities, and quality standards to enhance its export capabilities. With the right support from the government, along with a focus on innovation and quality, Indian solar manufacturers can position themselves to capture a larger share of the global market.
As the world shifts towards renewable energy, the importance of a robust and competitive solar manufacturing sector in India cannot be overstated. The coming years will be crucial in determining whether India can emerge as a significant player in the global solar market.
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