India’s clean energy manufacturing is feeling the impact of Chinese predatory pricing, which is affecting the country’s ability to promote its ambitious domestic manufacturing under the Production Linked Incentive (PLI) scheme, a government official told The Indian Express on Wednesday.
“The Chinese have aggressively slashed prices in the clean energy sector such as solar energy, posing a challenge for domestic manufacturing growth. Even anti-dumping duties are insufficient. Solutions such as collaboration with the West are being explored, as several Western countries, including Germany, are facing similar challenges,” the official said.
This comes days after the US advised India to “expand and protect” its clean energy manufacturing. India’s PLI schemes have invested over $4.5 billion to catalyse nascent clean energy manufacturing, however, “additional policies are essential” to expand and protect these investments in the face of “global market dynamics” and “thin profit margins”, according to an India- US joint statement released Saturday.
This is not the first time concerns have been raised over China’s impact on domestic clean energy manufacturing. The Economic Survey 2023-24 had highlighted that China’s manufacturing trade surplus has been expanding since 2019 due to weak domestic demand and increasing industrial capacity. The mismatch between domestic supply and demand in China has widened in recent years, prompting Chinese companies to seek additional markets overseas, the survey noted.
Indicating coercive actions taken by China to restrict India’s access to solar equipment, the survey stated: “…in response to India’s anti-dumping probe against Chinese entities, China has been quietly blocking India’s access to solar equipment.”
Notably, to safeguard investments in domestic solar photovoltaic (PV) module manufacturing, including those under the PLI scheme, the Ministry of New and Renewable Energy (MNRE) reinstated the Approved List of Models and Manufacturers (ALMM) order on April 1.
This order bars domestic solar projects from using imported modules, primarily from China, which are sold at significantly lower prices. In June 2024, imported modules were priced at an average of 9.1 cents per watt (CIF basis), while domestic modules averaged 18 cents per watt, according to CRISIL.
Earlier this month, the ministry announced plans to extend the ALMM order to solar cells from April 2026. The PLI scheme for high-efficiency PV modules, with a total budgetary outlay of Rs 24,000 crore across two tranches, also incentivises solar cell production.
Notably, 3,212 MW of Arizona-based First Solar’s module manufacturing capacity in Tamil Nadu is listed in the ALMM, making it one of India’s largest module manufacturers. First Solar is also a beneficiary of the PLI scheme, eligible for Rs 1,177 crore in incentives for establishing 1,700 MW of manufacturing capacity.
“Let’s be clear: imported solar modules and cells are being dumped from China, and this anti-competitive behavior has distorted market pricing. Chinese solar manufacturers are selling their products at prices below the cost of production due to systemic overcapacity in Chinese crystalline silicon solar supply chains,” Sujoy Ghosh, VP & MD of First Solar’s India operations, told The Indian Express earlier.
India has a similar list for wind turbines, the Revised List of Models & Manufacturers (RLMM), but wind turbine manufacturers are not yet eligible for PLI schemes, despite industry appeals.
Meanwhile, the Advanced Chemistry Cell (ACC) PLI scheme, which aims to incentivise 50 gigawatt hours (GWh) of battery manufacturing, has already allocated 40 GWh, including 20 GWh to Ola Electric, 15 GWh to Reliance Industries, and 5 GWh to Rajesh. Exports. This scheme, with a Rs 18,100 crore budgetary outlay, is technology-agnostic – meaning beneficiaries can set up capacities for electric vehicle (EV) batteries or for batteries used in energy storage systems.
To incentivise the production of key battery materials such as graphite, the domestic industry has called for greater collaboration with the US.
“We’re pushing for a critical minerals agreement, similar to the US-Japan agreement, which would make Indian products compliant with the Inflation Reduction Act (IRA). It will benefit India because the entire raw material ecosystem – technology, capital, and investments into mines – will follow naturally. It also won’t cost the government anything – it’s not a subsidy scheme,” Vikram Handa, MD of Epsilon Advanced Materials, a Mumbai-based company that manufactures graphite anodes, told The Indian Express in July.
On Monday, India also joined the US-led Minerals Security Finance Network, a coalition of 14 countries and the European Union (EU), to secure critical mineral supply chains, including graphite, copper, lithium, and silicon. The initiative recognizes that meeting the growing global demand for these minerals requires both public and private sector collaboration across member nations.