"India's solar energy is already very cheap, but they still choose China's."

【By Wang Yi, Observer Net】Driven by a surge in power demand, India’s solar industry is expanding at an astonishing pace, but an awkward reality has emerged: even though the price of India’s photovoltaic (PV) modules is approaching that of China, overseas buyers still prefer products from China.

Nikkei Asia, citing data from research firm Mercom India Research, reports that since 2024 capacity doubled to more than 210 gigawatts, the total production capacity of India’s PV manufacturers has come close to nearly three times its domestic demand. Against this backdrop, finding new markets is always a key challenge the industry faces.

The United States, the most important export market for India’s solar enterprises, started imposing anti-subsidy duties of nearly 126% on India’s solar cells and modules at the end of February, sharply increasing export pressure.

The report says another core obstacle India’s solar sector faces is a cost disadvantage. For a long time, compared with products made in China, India’s PV modules have carried a premium, which is especially evident in markets that have not proactively “de-coupled” from China.

However, this price gap is gradually narrowing. Data from well-known research firm EUPD Research shows that in early 2024, India’s modules were about $0.09 per watt more expensive than products from China. But as scale effects increasingly come into play, by the end of March this year, the gap had narrowed to about $0.054 per watt.

This week, China continued to fully cancel the export VAT rebate for photovoltaic products, which had been in place for more than a decade. EUPD Research expects this will further narrow the price gap between China and India to about $0.046 per watt.

“We’re steadily moving closer to a stage that is truly competitive.” Prashant Mathur, CEO of Indian solar manufacturer Saatvik Green Energy, said, “Strategically speaking, this is a critical moment for Indian manufacturers.”

But even so, overseas customers are not rushing to switch to India. Every buyer interviewed by the Japanese media outlet said they still prefer to choose Chinese PV products.

Sibi Vetha Raj, business development manager at Dubai’s Falcon Energy, said, “We previously tried to source Indian products, but the prices were very high—the gap was close to 20%.”

Jemshiyas Parambil, who leads the Positive Zero project in Dubai, also said plainly, “We compared it a long time ago: China’s prices are much lower, and there are more options on the list of Tier 1 manufacturers. Indian manufacturers are not well recognized here.”

It is understood that only 3 Indian companies have entered BloombergNEF’s global list of Tier 1 PV module manufacturers: Adani Solar, Vikram Solar, and Waaree Energies Limited; the rest are almost monopolized by Chinese companies.

Even representatives from two companies in Bangladesh said that Indian manufacturers are currently not seriously doing market promotion at all, and they don’t even know whether India has the ability to supply steadily.

What’s ironic is that even after Bangladesh says this, Sudhir Reddy, Chief Strategy Officer of Indian PV firm Premier Energies, is still “passing the blame” to Chinese companies, saying that his company had previously exported to Bangladesh, but after “China’s low-price dumping intensified,” it stopped the related business.

PV experts point out that to make overseas buyers—especially buyers in emerging markets in the Middle East, Asia, and Africa—truly view India as an alternative supply source, the price gap between Indian PV and Chinese PV still needs to narrow further, to at least about half of the current level.

On November 16, 2025, inside a 12-megawatt PV power station in the open-pit Surajpur coal mine area in India, workers are cleaning solar panels. IC Photo

Achieving this goal may require about three years, depending on larger-scale expansion and vertical integration in the battery and silicon wafer manufacturing stages, so as to enhance cost-control capabilities. At present, Indian companies still rely on China to provide upstream components, and India’s move to impose a 25% basic tariff on battery imports from China further drives up the prices of end modules.

Analyzing the situation, Rajan Kalsotra, a senior adviser at EUPD Research, said that overall, India is higher than China in terms of power costs, financing costs, and raw-material costs. Even if the price gap narrows, the structural cost disadvantage will still remain.

Nikkei Asia notes that India’s domestic policy protection also brings some problems. Marius Mordal Bakke, vice president at Rystad Energy, an energy research firm, said that because the Indian government requires domestically made components for government-supported projects, manufacturers in India have substantial pricing power in the domestic market: “Because India’s battery production capacity is still not large, to a certain extent companies can actually set prices on their own, and there are almost no external competitors entering.”

The report says that currently Indian manufacturers have a backlog of orders; the next 6 to 8 months are already booked out. However, they have not yet truly felt the pressure of excess capacity, which allows them to maintain relatively high profit margins.

Prerna Prabhakar, a researcher at the Centre for Social and Economic Progress, also believes that in order to protect domestic industry, India’s policies, to a certain extent, “have made the supply chain lose competitiveness,” and the lack of external competitive pressure has weakened the drive for innovation.

This is also reflected in research and development investment: data from Wood Mackenzie shows that Chinese manufacturers, on average, spend about 4% of their revenue on R&D, while Indian companies spend less than 1%.

Yana Hryshko, head of the company’s solar supply chain research, points out that because India’s efficiency lags by about 1.5 percentage points, Indian modules need more panels to generate the same amount of electricity, further raising costs: “Indian module prices are higher, but the technological level is lower.”

In Kalsotra’s view, besides price, other non-cost factors will also affect how popular Indian PV products are, such as sustainability and reliability. He believes that although demand for new energy in the Middle East and other markets has increased due to geopolitical developments, this will not significantly improve the export prospects for Indian manufacturers: “The Middle East and European markets have basically already been taken up by Chinese manufacturers.”

This article is an exclusive piece from Observer Net. Without authorization, it may not be reproduced.

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