China’s proposed export controls on solar technologies could hurt India’s plan to build a local supply chain. While immediate module production remains safe, long-term goals face risks. Vinay Rastogi of Premier Energies said, "We do not expect any restriction on the existing businesses and can operate cell and production lines."
China's bid to restrict exports of critical solar technologies could dent the Indian industry's ambition of building a vertically integrated domestic supply chain for solar manufacturing.
Industry players speaking to businessline suggest that while an immediate disruption to module production is unlikely, long term capacity additions and localisation goals can be jeopardised as the industry continues to be dependent on China for equipment and machinery.
The Chinese Ministry of Commerce last week proposed export controls on 12 next-gen technologies involved in solar manufacturing which included partial restrictions on popular cell technologies as well as complete bans on advanced equipment for crucial upstream components like wafers and polysilicon. The proposal is currently open for industry consultation.
Vinay Rastogi, Chief Business Officer (CBO) & Director at Premier Energies expects the restrictions to be graded in terms of how advanced the technology is with newer higher efficiency tech facing stricter curbs.
"We do not expect any restriction on the existing businesses and can operate cell and production lines by importing wafers. There is no kind of short-term impact on the sector even going forward two to three years," he said.
He added that the impact will be felt when the newer technologies become more readily acceptable and are commercialized. "But that gives us some time to prepare accordingly," he said.
The restrictions can throw a wrench for Indian module manufacturers who are now planning to enter upstream segments like cells, Ingots wafers and polysilicon.
Ingots are expected to particularly face the heat as China holds a near monopoly over its production both in terms of the final product as well as the equipment used in its production.
"For cells, wafers and Polysilicon there are non-Chinese suppliers. But for ingots, the technology is sensitive. So that might have a significant impact," Arulkumar Shanmugasundram CEO and Managing Director SWELECT Energy Systems.
Interestingly, Shanmugasundram suggests that many global equipment suppliers while holding the tech continue to manufacture in China which means export restrictions there could force them to develop an ecosystem for manufacturing these equipment in alternative locations like India.
Amit Manohar , Secretary General ,The Indian Solar Manufacturers Association (ISMA) suggests that countries like Germany, Japan, Taiwan, South Korea and the United States offer valuable expertise in equipment, materials and advanced cell processes. "Indian manufacturers are well positioned to expand these collaborations while strengthening domestic engineering, research and equipment capabilities," he said.
Meanwhile, the MNRE had earlier this year extended mandatory sourcing requirements from the Approved List of Models and Manufacturers to include ingots and wafers ensuring that all solar projects in the country from the February 2028 deadline meet the domestic manufacturing standards. Rastogi said that it is not clear as of now how an export ban from China will impact the domestic ingots wafer requirement deadline.
Anujesh Dwivedi, Partner, Deloitte India suggests that as blanket ban is not anticipated, and it is still possible to get imports after obtaining necessary licenses.
Consequently, equipment lead times may become lengthier The scaleup of India's domestic ecosystem would depend on whether the required supplies for restricted goods have already been secured or not, he added.