India-China Border Tension Begins Affecting Domestic Solar Projects Adversely

There have been reported delays in releasing of consignments from China at several Indian ports, affecting the pace of project development


The latest border dispute between India and China is starting to affect the Indian solar industry directly. The disruption in releasing the consignments at the ports has started to hurt solar developers, which in turn is delaying the development of several solar projects in the country, claim industry experts. According to them, the Indian companies have already paid for the consignments which are presently stuck at various ports of the country.

Speaking to Mercom,the President of Rajasthan Solar Association said that it is the Indian companies who are adversely affected due to the deadlock at the ports. Some of the ports where these consignments are stuck are Jawaharlal Nehru Port, also known as Nhava Sewa Port in Mumbai, Krishnapatnam Port in Andhra Pradesh, and a few private ports in Gujarat. Further, he said that the Indian solar developers have also issued advance payments and letter of credit (LoC) for the consignments.

He said that a lot of developers have complained about their consignments being stuck at these ports.

Asked what the reason could be, he added, “It is arm-twisting and sending a message to China.” He said that the government should understand that it is not China who is getting affected, but it’s the Indian developers who are at a loss.

He added that in Rajasthan, although projects that have already been commissioned will not get affected, projects which are at their advanced stage of development will be severely affected if the consignments are not released on time.

“Approximately 5GW of solar projects which are currently being developed in the state,is likely to get affected by the deadlock,” he added.

He also pointed out that the deadlock at ports over the consignments will also affect the central government’s ambitious target of achieving 100 GW of solar projects by December 2022.

The Indian solar industry depends heavily on imports. In the calendar year 2019, India imported solar cells and modules worth $2.17 billion. China was the largest exporter of solar modules and cells to India in CY 2019, with a market share of nearly 78%, followed by Vietnam, Singapore, Thailand, and Hong Kong.

Solar projects under implementation in the country are already struggling to be completed on time, given the ongoing coronavirus crisis and the subsequent lockdown. The wheels of the economy have started turning again, albeit slowly, with the lifting of the lockdown. Businesses and industries have resumed activities in a phased manner; however, with the number of COVID cases increasing in many parts of the country, we could see further delays. The stakeholders believe that the 30-day extension given to renewable projects is insufficient.

The developers want that the extension should be increased to at least six months to meet the challenges of labor mobilization and other logistical constraints as a result of the lockdown. Considering the ongoing slowdown triggered by the virus, the India-China relationship turning sour is further delaying projects and complicating matters for the stakeholders.