India strives to counter Chinese solar industry

An employee walks among solar panels installed in the Indian Ministry of the Environment building in New Delhi, India on July 17, 2020. Photo: AFP

India’s leading renewable energy developer, ReNew Energy Global PLC, has reportedly planned to change its strategy from growth based on China’s raw material supply to seeking independent development, which has been seen as a move by India to “counter China” in the sector.

Until recently, ReNew Energy and other Indian renewable energy developers focused on developing products using raw materials imported from China. In a steep turn, they “plan to manufacture the panels and components themselves, as part of an all-out India-led campaign to break China’s lockdown on the solar supply chain,” he said. The Wall Street Journal reported on Wednesday.

While it is understandable for any manufacturer to strengthen their competitiveness or diversify their sources of supply, it is very important to point out that the “against China” initiative, as some media and politicians have portrayed it, is wrong and pursuing development by decoupling with leading players would obviously not be a wise choice for India.

For starters, this would create impending hardship for Indian manufacturers given that around 90% of the components and parts for manufacturing its solar panels come from China, and a simple tariff increase would increase costs for Indian producers and even would lose important job opportunities.

Additionally, India has pledged to achieve net zero carbon emissions by 2070, which was seen by many as an ambitious target. It is crucial for India to accelerate the implementation of the new energies in such circumstances and to disengage from its biggest supplier in the solar sector is a very risky choice.

Interrupting a mature industrial chain is never a good choice for the growth of economies. Instead, they need to fit into the regional and global value chain as a better way to spur sustainable growth, as China has demonstrated over the past decades with its steadfast policy of openness.

China has now become a major player in the global solar industry, producing more than 70% of the photovoltaic modules for the global market. In the first three quarters of the year, China produced 360,000 tonnes of polysilicon, a high purity silicon which is the main material of solar cells, up 24.1% from the previous year Wang Bohua, general secretary of the China Photovoltaic Industry Association, said at the annual China Photovoltaic Industry Conference on Wednesday.

The country exported $ 23.1 billion worth of photovoltaic products from January to October, up 44.6% year-on-year. Its exports of photovoltaic modules grew 32.2% over the same period, Wang said.

Such energetic growth in China’s solar industry does not happen overnight. Its advantages are the product of years of accumulated experience, as well as the comprehensive manufacturing capacity of China, the most vital manufacturing center in the world.

It is important to stress that Chinese producers did not develop in a closed trading environment, and the expansion of solar and other Chinese industries has generated synergistic effects in Asia and even wider regions.

The Regional Comprehensive Economic Partnership (RCEP) will enter into force next month. As a mega free trade agreement, covering 30 percent of the world’s population and 30 percent of the global economy, it is expected to significantly boost the economic integration of all members. By improving industrial integration, China and other economies in the framework are expected to experience faster development based on each other’s comparative advantages, including the solar industry.

However, by refusing to fit into regional value chains and, sadly, attempting to undermine mature industrial chains in China from geopolitical calculations, India is in effect holding back the prospect of its own industries.

It is the acceleration of nationalism and protectionism in the country that poses the real threat to its economic development and the Indian government should undertake a thorough reflection on its policy towards China, especially after its years of futile efforts to decouple. its economy of China.

As for the Indian solar industry, developing through regional cooperation and expanding through positive competition would be a better choice instead of decoupling with its largest supplier.

The author is an editor at the Global Times. [email protected]

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