India’s Solar Panel Import Bill Could Hit $30 Billion

India may face an annual cost of $30 billion for imported solar panels if it aims to achieve its 2030 target of 500 GW of wind and solar capacity, according to a report from the Global Trade Research Initiative. This projection highlights the country's increasing reliance on China for solar components, raising concerns about energy security.

Currently, while India does manufacture some solar equipment domestically, it remains significantly dependent on imports for raw materials and components. Ajay Srivastava, founder of the Global Trade Research Initiative, noted that local production is largely import-driven, primarily focusing on the final two stages of the manufacturing process. "About 90% of solar manufacturing in India involves assembling modules from imported cells, contributing only 15% local value addition," he explained.

Although India has been rapidly installing solar and wind capacity—reaching a total of 90.8 GW as of September 2023, up from just 2.8 GW in 2014—this pace is insufficient to meet the 2030 goal. In fiscal 2023-24, the country added 15 GW of solar capacity, but it needs to install between 65 GW and 70 GW annually to stay on track, with solar expected to account for approximately 80% of this increase.

The report emphasizes that meeting this ambitious target will be challenging given India's heavy reliance on imports, which could escalate the annual cost of solar imports to $30 billion. In the last fiscal year, India imported solar components and equipment worth $7 billion, with 62.6% sourced from China.