**India**: India is rapidly expanding its renewable energy production with government subsidies and local manufacturing targets to challenge China’s dominance in solar panels and battery supply, driven by geopolitical tensions, soaring domestic demand, and global efforts to diversify supply chains, despite ongoing reliance on Chinese materials.
China, recognised as a global leader in clean energy production, is facing increasing competition from India, a significant customer for its solar panels and electric vehicle batteries. India is leveraging a series of government initiatives aimed at boosting domestic production of renewable energy technologies, a move influenced not only by the nation’s soaring energy needs for its 1.4 billion population but also by the growing desire among other countries, particularly the United States, to reduce dependency on Chinese supply chains.
Despite its ambitions, India remains a comparatively minor player in the renewable energy sector, having produced roughly 80 gigawatts of solar modules last year, far below China’s production of over 800 gigawatts. The country’s reliance on coal, its predominant energy source, underscores the challenges it faces. Even as India aims to enhance its green technology manufacturing, coal continues to play a central role in its energy mix.
In an effort to stimulate local manufacturing, the Indian government is rolling out substantial subsidies for the production of solar cells and batteries domestically while imposing restrictions on foreign products in major renewable energy contracts. For example, to engage in the €1.3 trillion initiative to install rooftop solar panels for 27 million homes by 2030, companies are required to manufacture panels within India.
Strategically, India’s drive to develop solar, wind, and electric vehicle factories is also motivated by its historical tensions with China, provoking a need for energy security and self-sufficiency. “To ensure we have energy independence, we need to have manufacturing capacity,” stated Sudeep Jain, additional secretary in India’s Ministry of New and Renewable Energy, acknowledging the cost differences posed by foreign production.
The challenge remains that China currently dominates the essential components of renewable energy infrastructure, controlling more than 90% of the global supply of polysilicon used in solar panels. Consequently, despite India ramping up its solar panel production, it still imports a significant portion of the solar cells and silicon wafers necessary for manufacturing.
Moreover, India’s battery production capability is minimal, and firms such as Reliance Industries and Ola Electric have struggled to meet the ambitious targets set forth in exchange for government support, mostly related to the dominant position China holds in processing critical battery minerals, including lithium. Amit Paithankar, CEO of Waaree Energies, highlighted the urgency for India to diversify its supply chains affected by China’s “first mover’s advantage.”
Significant momentum is evident in India’s renewable energy sector, with wind and solar capacity nearly doubling in the past five years. By 2030, India plans to incorporate 500 gigawatts of non-fossil fuel sources into its energy grid, a goal supported by the introduction of new subsidies for locally produced solar and battery cells starting next year.
Domestic demand is a crucial element driving this expansion; over half of India’s solar modules were exported to the U.S. last year. The imposition of tariffs on Indian products by the Trump administration has also created an environment where Indian firms could emerge as cost-effective suppliers for the U.S. market, particularly as tariffs on Chinese goods have been significantly higher.
Prime Minister Narendra Modi’s administration has sought to strengthen bilateral relations with the U.S. and aims for negotiations on a trade deal that can enhance India’s competitive edge. Jain remarked, “Whatever the United States is going to import, we may still be the most competitive to supply it.”
The geopolitical landscape brings further significance to India’s efforts to bolster factory jobs through the renewable energy sector. With a young demographic—two-thirds of the population under 35—and a manufacturing economy that constitutes just 13%, the country is positioned to tap into the global energy transition.
Tamil Nadu has emerged as a central hub, attracting factories in clean energy, aided by state incentives including subsidies for land and workforce support. The region’s government initiatives aim to promote energy localization.
In factories across Tamil Nadu, such as the Tata Power solar panel facility employing approximately 2,000 female workers, individuals are gaining opportunities that impact their lives and careers significantly. Workers like Amala K. and Varsha A.R. have shared how employment in the renewable sector allows them to pursue further education and defer personal milestones, such as marriage, in pursuit of their aspirations.
Despite the burgeoning local industry, many critical components continue to be imported from China, as underscored by Tata Power CEO Praveer Sinha, who emphasised the need for a resilient supply chain that is less vulnerable to geopolitical tensions. In response to previous disruptions, U.S. governmental support aimed at diversifying supply chains has facilitated projects like Tata’s solar farm, powered by solar panels produced domestically, though still reliant on Chinese imports for basic materials.
As India navigates its burgeoning clean energy landscape, the question of focus—domestic production or export—is predominant among renewable energy companies. With significant investment in facilities aimed at supplying both the Indian market and abroad, the future trajectory of India’s renewable energy ambitions may ultimately hinge on international trade dynamics. Sumant Sinha, CEO of ReNew Power, aptly summarised, “Whether we can become an alternative to China depends on what other countries do.”
Source: Noah Wire Services
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