Indian Solar Panel Manufacturers Challenged with SEA Imports

Indian solar panel manufacturers are finding it difficult to compete with the flood of low-cost Chinese imports coming into the country through countries like Vietnam, Malaysia, and Singapore. Chinese companies are taking advantage of Free Trade Agreement (FTA) loopholes to sell their products in India.

In April 2022, New Delhi imposed a 40% customs duty on solar modules and a 25% duty on solar cells in an effort to promote domestic production and decrease Chinese imports. However, Chinese companies have managed to circumvent these steep tariffs and maintain their supply to Indian solar farm developers.

In the past, Chinese companies have successfully used this strategy to avoid local tariffs. In August 2023, a year-long investigation by US federal authorities uncovered that five Chinese solar panel firms had bypassed tariff regulations by conducting their operations in countries like Cambodia, Malaysia, Thailand, and Vietnam.

Since the introduction of tariffs, there has been a decrease in Chinese exports directly to India. However, from April to August 2023, the import of solar panel modules from Vietnam and Malaysia has seen a significant increase, making up 60% of all imports into India. It is worth noting that the majority of these products are from Chinese companies.

Indian manufacturers have expressed concerns that imports are damaging the domestic industry, as Chinese firms are allegedly dumping their products by exploiting the FTA route.