Govt To Use New Monitoring System to Track Solar Equipment Imports Amid China Supply Tightening

India is set to introduce a new import monitoring system for solar energy equipment import, aimed at tracking the origin, content, and compliance with harmonised codes.

This move, announced by Ministry of New and Renewable Energy (MNRE) Secretary Santosh Kumar Sarangi, comes amid growing concerns over supply chain disruptions from China, including restrictions (now relaxed) on tunnel boring machines (TBMs) and rare earth materials.

The system is designed to bolster domestic manufacturing and ensure transparency in imports, particularly as India pushes for self-reliance in renewable energy.

The monitoring initiative will complement existing policies like the Approved List of Models and Manufacturers (ALMM). Sarangi stated that the system would help identify and address any discrepancies in imported solar components, thereby supporting local producers.

This announcement follows India's launch of anti-dumping investigations into solar encapsulants from China, South Korea, Vietnam, and Thailand, initiated by the Ministry of Commerce and Industry on July 15, 2024.

The probes were prompted by complaints from domestic firms like Vishakha Renewables, citing material injury due to dumped imports. It is worth noting that similar investigations target mobile covers from China and the chemical 4-ADPA from China and the EU.

In March 2024, Chinese Foreign Minister Wang Yi assured India of addressing concerns over rare earths, fertilisers, and TBMs during bilateral talks. However, earlier restrictions imposed by China in December 2023 on rare earth magnets have severely impacted Indian industries, especially electric vehicle (EV) manufacturing and infrastructure projects.

Reports revealed that the number of Indian companies awaiting export licences from China had doubled, leading to supply chain bottlenecks. For instance, the auto sector has sought government intervention to expedite approvals, as key EV parts remain in limbo.

In response, India has been actively seeking alternatives. Discussions with Australia for rare earth supplies are underway to counter China's near-monopoly, which controls about 60% of global rare earth processing.

The government is also preparing a Rs 3,500 crore incentive scheme to promote domestic production of critical minerals, reducing acute dependence on imports.

This aligns with broader efforts, including mandates for locally made solar cells in government projects starting April 2026, as per a October 2024 renewable energy ministry directive.

Further, official data indicates that solar imports from free trade agreement nations surged, raising suspicions of rerouting from China.