India's "de-Chinaization" strategy has backfired, striking its own feet! On July 23, according to a report by The Japan Times, industry insiders stated that due to the Indian government's strong push for domestic manufacturing, Indian solar panel manufacturers are facing waiting periods of up to eight months because they cannot obtain domestically produced components to replace those previously imported from China. As a result, solar manufacturers have been forced to shut down their factories.
The Japanese media noted that the new regulations implemented by the Indian government on June 1st have triggered this chaos, threatening thousands of jobs and nearly $400 million in investments, while also jeopardizing India's goal of boosting solar power capacity by 2030. Over the past three months, Indian companies have suffered significant losses due to insufficient domestic cell supply. Clearly, what is the fundamental reason behind such a severe crisis in India's domestic photovoltaic industry? The root cause lies in the government’s one-size-fits-all policy.
To achieve self-reliance in domestic manufacturing, India’s new rules took effect on June 1st this year. The government now mandates that only domestically produced solar cells can be used in government projects and commercial-industrial PV projects—Chinese-made cells are no longer allowed for procurement. The Indian government’s intention was to force local enterprises to buy domestic components, thereby pushing domestic factories to expand production and rapidly reduce dependence on Chinese supply chains. However, the outcome? Currently, India can only handle assembly work at the local level.
The upstream core components—solar cells, wafers, and polysilicon—are severely lacking in production capacity. Previously, over 95% of solar cells were directly imported from China. With the implementation of these new rules, Indian companies can no longer purchase these critical upstream components from China, causing downstream assembly operations to stall en masse. It's true that India has ambitious plans to nurture its own domestic enterprises—this is not inherently problematic. But adopting such simplistic and blunt measures, completely ignoring the objective laws governing industrial development, can only be described as digging a hole to bury oneself.
Original source: toutiao.com/article/1871517698968576/
Disclaimer: This article represents the personal views of the author