India and US trade restrictions have hard-hitting effect on Chinese solar component manufacturers

The US House of Representatives has passed a legislation banning import of goods from the Xinjiang region according to reports from Bloomberg.

Earlier this year India had announced a 40 per cent import levy on solar module components in an effort to reduce dependence on foreign supplies.

Xinjiang which is home to China's Uyghur muslim population is also the region responsible for 45 per cent of global production of polysilicon. Polysilicon is an essential component in the manufacturing of solar panels.

India and US's trade restrictions is creating challenges for the industry and China is urging the solar firms to fight against these trade restrictions using legal weapons.

The deputy chief of the Trade Remedy and Investigation Bureau at the Commerce Department Wang Xin said that "This (trade restrictions by India and US) is building up trade protection systems and increasing trade frictions, which have brought severe challenges to our solar companies."

Shares of Chinese solar companies fell after the US House of Representatives passed the legislation banning goods from the Xinjiang region.

US customs have also detained solar panels imports manufactured by several Chinese companies due to a suspicion that the solar panels contain silicon manufactured by a company with ties to Xinjiang.

There have also been recommendations by a US trade agency of extending Trump era tariffs on solar components from China.