The Meteoric Rise of Indian PV Module Exports

The fiscal year 2024 marked a significant milestone for Indian PV module exports, which surged to approximately $2 billion—nearly 23 times higher than fiscal 2022, according to a report by IEEFA and JMK Research. This unprecedented growth solidifies India's position as a key player in the global PV module exports market.

In fiscal 2023, an astounding 97% of Indian photovoltaic (PV) modules were exported to the US, with this figure increasing to 99% in fiscal 2024. Beyond the US, Indian PV modules also penetrated markets in South Africa, Somalia, Kenya, the United Arab Emirates, Afghanistan, Nepal, and Bangladesh.

Increased Profit Margins and Export Incentives

Despite higher logistics costs, Indian manufacturers reported profit margins 40% to 60% higher when selling PV modules to developed countries like the US compared to domestic sales. This profitability has incentivized manufacturers to prioritize exports. A slump in domestic demand for PV modules, caused by delays in implementing the Approved List of Models and Manufacturers policy in April 2024, further propelled Indian exports.

Simultaneously, many countries have adopted "China Plus One" strategy, seeking alternatives to Chinese photovoltaic products. India has emerged as a feasible and reliable alternative supplier of solar panels under this shift in trade strategies.

Impact of US Tariffs and Global Trade Dynamics

The rise of Indian PV module exports is also linked to US tariffs on Chinese PV products, which aim to reduce dependency on Chinese imports. These tariffs, combined with a US Department of Commerce anti-dumping and countervailing duty investigation on imports from Southeast Asia, have created opportunities for India to fill the supply gap. The expiration of the Free Trade Agreement adds another dimension to India's potential dominance in the US photovoltaic market.

The report suggests India could surpass Southeast Asian PV manufacturers to become the top PV module exporter to the US. However, a balancing act is crucial to ensure sufficient domestic supply, particularly for smaller markets like residential rooftop solar, where cost sensitivity and availability significantly influence adoption.

Ensuring Supply-Demand Balance

While India positions itself as a credible alternative to China in the global PV market, domestic supply challenges must not be overlooked. The gap between supply and demand in the Indian solar energy market can influence solar module prices, impacting critical segments like residential rooftop solar. Achieving equilibrium between exports and local supply is essential for sustaining growth in the solar energy sector.

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