China curbs expose India's dependence on solar, battery manufacturing machinery

India's dependence on China for machinery and technology used in upstream solar manufacturing -- from ingots and wafers to cells -- and battery-cell production is emerging as a major vulnerability for its clean energy manufacturing ambitions. With access to Chinese supplies becoming increasingly uncertain amid frequent export curbs, Indian manufacturers are exploring equipment and technology partnerships with suppliers in other countries to diversify their sourcing, Moneycontrol has learnt. Industry representatives said Indian solar manufacturers had faced intermittent restrictions this year on access to Chinese manufacturing technology, equipment and technical support, affecting plans to set up upstream manufacturing facilities for wafers, ingots and polysilicon.

More recently, on October 16, China introduced an interim pre-export registration requirement for specified solar technology transfers while proposing to prohibit or restrict exports of 12 photovoltaic manufacturing technologies. The proposed controls, covering selected polysilicon, wafer and cell manufacturing technologies and associated equipment, are expected to be taken up for a decision by the Chinese government after November 15. India has already built substantial solar module manufacturing capacity, with supply in this segment outpacing domestic demand. Cell manufacturing capacity is also expanding rapidly, with Union Minister for New and Renewable Energy Pralhad Joshi saying it is expected to reach 70 GW by December 2026 and cross 100 GW by May-June 2027.

But, the next focus for the industry is deeper integration of the supply chain through domestic manufacturing of polysilicon, ingots and wafers -- the key inputs used to produce solar cells. This is where India's manufacturing capabilities remain particularly limited, leaving expansion plans vulnerable to restrictions on access to Chinese technology and equipment. Industry scouts for alternatives to Chinese machinery To mitigate the risk of supply disruptions, the industry is scouting for technology and equipment partnerships beyond China. Subrahmanyam Pulipaka, Chief Executive Officer of the National Solar Energy Federation of India (NSEFI), told Moneycontrol that manufacturers were exploring tie-ups with suppliers in Germany, South Korea, Japan, Italy and Australia.

However, the alternatives remain limited, as some manufacturers in these countries also outsource production to China, he said. Amit Manohar, Secretary General of the Indian Solar Manufacturers Association (ISMA), said Indian manufacturers were working to build resilience through diversified technology sourcing, global partnerships and stronger in-house engineering capabilities. "Companies are increasingly exploring equipment and technology partnerships across Europe, Japan, Taiwan and other markets, reducing concentration risks. This diversified approach ensures greater supply chain flexibility, technological adaptability and long-term manufacturing competitiveness,"

Manohar told Moneycontrol. Building domestic machinery-making capabilities, however, will take time. "It will take at least three years in the best-case scenario and up to five years realistically," Pulipaka said. China's pricing power adds to the challenge The dependence also leaves Indian manufacturers exposed to pricing pressure across the solar value chain. Pulipaka said China had raised cell prices while lowering module prices when Indian manufacturers expanded module production, squeezing their margins. "Now, as India catches up in cell manufacturing, China has adopted a similar approach by raising wafer prices while lowering cell prices.

This makes it costlier for Indian manufacturers to produce cells while allowing cheaper Chinese cells to compete with domestic products, putting local manufacturers at a disadvantage," he said, while adding that the strategy was aimed at choking India's domestic solar manufacturing industry. Machinery dependence runs deep across solar and batteries A NITI Aayog report prepared with Crisil Intelligence found that capital goods used in polysilicon, wafer and cell manufacturing are concentrated largely in China. Separately, a January report by The Energy and Resources Institute (TERI) found that more than 90% of high-end solar manufacturing equipment, including furnaces, PECVD/ALD tools and diamond-wire saws, is imported.

The exposure extends to batteries as well. India imported $1.5 billion worth of battery-cell manufacturing machinery from China in 2022, according to an analysis by the International Institute for Sustainable Development (IISD). China was the leading supplier across several equipment categories, including calendaring, slitting, electrolyte-filling and cell-formation machinery.