India’s solar industry faced a significant downturn in 2024, with exports of solar modules and cells plummeting by 16%, totaling $1.5 billion compared to $1.8 billion in 2023, according to data from Mercom. This decline is primarily due to increased scrutiny in shipping processes, including rigorous port inspections and barcode verifications, coupled with concerns regarding the use of potentially Chinese-made components.
Export Trends in 2024
Photovoltaic modules were the standout products, making up an impressive 97.7% of total solar exports, while solar cells accounted for a mere 2.3%. Notably, the United States emerged as the leading destination for these solar exports, claiming a staggering 97.5% share of the total shipments.
- Photovoltaic Modules: 97.7% of exports
- Solar Cells: 2.3% of exports
- Top Export Market: United States (97.5%)
Decline in Imports
On the import front, solar cells and modules also saw a decline, with total imports dropping to $4.5 billion, marking a 10.2% decrease from $5 billion in 2023. Of these imports, solar modules represented 65.1%, while solar cells made up 34.9%.
The reintroduction of the Approved List of Models and Manufacturers order played a crucial role in curbing solar module imports. Additionally, government initiatives like the PM Suryaghar Muft Bijlee Yojana and PM-KUSUM have mandated that solar modules meet domestic content requirements, further impacting import levels.
- Solar Modules in Imports: 65.1%
- Solar Cells in Imports: 34.9%
- Top Supplier: China (86.5% of total imports)
Potential Market Disruptions
Looking ahead, experts are cautioning that the threat of reciprocal tariffs from the U.S. could disrupt India’s solar export market significantly. According to Vikram V, Vice President at ICRA Limited, the current 40% customs duty imposed on module imports could result in adverse consequences for Indian manufacturers if tariffs are reciprocated.
Rishabh Jain, Senior Programme Lead at the Council on Energy, Environment and Water, emphasized that losing access to the U.S. market could severely hinder Indian manufacturers’ ability to find alternative markets, potentially leading to industry consolidation.
- Customs Duty on Imports: 40%
- Risk of Tariffs: Potential disruption to exports
Recent Export Figures
In the last quarter of 2024, India’s solar product exports reached $212.2 million, reflecting a slight increase of 1.8% from $208.55 million in the previous quarter. However, exports fell sharply by 39.3% when compared to $349.44 million in the same quarter of 2023. The U.S. remained the dominant market, capturing 97.5% of exports in Q4 2024, an increase from 92.3% in Q3 2023.
- Q4 2024 Export Total: $212.2 million
- Comparison to Q3 2023: 97.5% of exports to the U.S.
Import Statistics for Q4 2024
During the same quarter, solar product imports totaled over $723.4 million, which was a staggering 64.8% decrease from $2 billion in Q4 2023. Notably, China continued to dominate the supply chain, accounting for 86.5% of total imports, although this was a decline from 89.5% in Q3 2024.
- Q4 2024 Import Total: $723.4 million
- China’s Share: 86.5% of imports
With these dynamics in play, the future of India’s solar market remains uncertain, and strategic actions will be necessary to navigate potential challenges effectively.
