India’s Solar Imports Nosedive in Q1 2020 Amid Lockdown Due to COVID-19

Solar imports totaled $151 million in Q1 of CY 2020


India’s solar imports fell by 77% year-over-year (YoY) in the first quarter (Q1) of the calendar year (CY) 2020 with $151 million (~₹10.8 billion) compared to $650 million (₹45.8 billion) during the same quarter in 2019, according to the latest trade data.

In a quarter over quarter (QoQ) comparison, Q1 2020 imports dipped by 72% compared to $529 million (~₹37.6 billion) in Q4 2019.

According to Mercom’s channel checks, the primary reason behind the slowdown of import activity was the ongoing COVID-19 pandemic, which kickstarted the disruption in the supply chain with the shutdown of manufacturing units in China. Recognizing this, the government of India, on February 19, 2020, had clarified that the disruption of the supply chains due to the spread of Coronavirus should be considered as a case of natural calamity for which force majeure clause may be invoked. Following this, the Ministry of New and Renewable Energy also issued an official memorandum stating that the time extension in scheduled commissioning of renewable projects due to the disruption of supply chains will be treated as a force majeure event.

India Solar Cell and Module Quarterly Import-Export Activity ($M)

Mercom India Research’s Q1 2020 India Solar Market Update report found that due to supply shortage and logistical issues, construction activity was affected, and most of the project commissioning timelines were extended and moved.

On the other hand, solar exports saw a slight increase of 5% YoY in the first quarter of 2020. In Q1 2020, the export of solar cells and modules amounted to $35 million (~₹2.5 billion), while it was $33 million (~₹2.3 billion) in the same period last year. In a QoQ comparison, exports fell by 53%.

The majority of the Indian solar imports were from China with 79% in Q1 2020, followed by Vietnam at 9% and Thailand at 7%. China’s share fell to 79% from Q4 2019 in which it accounted for 85% of the imports.

Country-wise Breakdown of Indian Solar Imports (%)

According to the trade data, India’s export to the United States continued to be strong at 78.6%, followed by Turkey at 10.1% and South Africa at 2.1%. In comparison with Q4 2019, the U.S. was the biggest market accounting for nearly 87% share of total exports. Notably, the U.S. just accounted for 15.4% of exports from India in Q1 2019.

Country-wise Breakdown of Indian Solar Exports (%)

Solar Import & Export Activity in FY 2019-20

For the financial year 2019-20, the import of solar cells and modules totaled $1.7 billion (~₹128 billion), a decrease of 22% YoY. However, the exports rose by 76% YoY at $213 million (~₹16 billion).

In FY 2019-20, Indian solar imports accounted for 77.5% from China, followed by Vietnam with 8.4%, Thailand with 7.2%, Singapore, and Hong Kong with 1.9% each, respectively. In FY 2018-19, China accounted for 78.4%, whereas Vietnam and Thailand accounted for 4.3% and 2.5%, respectively.

India Solar Cell and Module Import-Export Activity ($M) FY 2016-17 to FY 2019-20

Subscribe to Mercom India Quarterly Updates for a detailed analysis of data by country

In FY 2019-20, the industry saw a rise in the Indian solar exports, especially to the United States. India exported nearly 81% to the U.S., followed by Turkey (4.5%), and Belgium (3.2%). By comparison, India exported around 44% to the U.S. in FY 2018-19.

The safeguard duty imposed on solar cell and module imports from China, Malaysia, and Taiwan in 2018 is scheduled to end in July 2020. The Directorate General of Trade Remedies (DGTR) will hold an oral hearing on June 11, 2020, to discuss the continued imposition of the duty. Thie decision will have a significant impact on imports going forward.

Further, the Indian government has proposed the implementation of basic customs duty (BCD) on solar imports. This measure is also aimed at safeguarding the interests of domestic solar manufacturers who say that the import of cheap products from China is hurting domestic manufacturers. Mercom recently analyzed the implications of this duty on the special economic zones of the country.

Also, due to the disruptions caused by the COVID-19 pandemic and the prevailing situation because of the subsequent lockdown, the Ministry of New and Renewable Energy (MNRE) has extended the deadlines for the approved list of models and manufacturers (ALMM) List 1 (solar PV modules) and ALMM List-II (solar PV cells) by six months from March 31, 2020, to September 30, 2020.

The detailed data report on solar import and export is available by subscription of Mercom’s India Solar EXIM Tracker.

Anjana is a news editor at Mercom India. Before joining Mercom, she held roles of senior editor, district correspondent, and sub-editor for The Times of India, Biospectrum and The Sunday Guardian. Before that, she worked at the Deccan Herald and the Asianlite as chief sub-editor and news editor. She has also contributed to The Quint, Hindustan Times, The New Indian Express, Reader’s Digest (UK edition), IndiaSe (Singapore-based magazine) and Asiaville. Anjana holds a Master’s degree in Geography from North Bengal University, and a diploma in mass communication and journalism from Guru Ghasidas University, Bhopal.