India could replace Southeast Asian nations as top exporter of solar photovoltaic (PV) to US

India is poised to play a pivotal role in supporting the US renewable energy sector with its large-scale manufacturing capabilities, competitive production costs, and a strong STEM talent pool, a report by ValueQuest Investment highlighted.

The report noted that as the US navigates the complexities of energy policy under the Trump administration, the outlook for renewable energy remains strong.

It said that “India’s large-scale manufacturing base, STEM talent, competitive production cost (compared to Southeast Asia and Mexico), with reliability of supply, can make it a preferred partner.”

The report also indicated that India could potentially replace Southeast Asian countries as the top exporter of solar PV to the US, especially as the US seeks to reduce its dependence on Chinese supply chains.

“India has the potential to replace Southeast Asian countries as the leading exporter of solar PV to the US,” the report added.

The report states that the US Inflation Reduction Act (IRA) has created a strong foundation for accelerating investments in renewable energy, particularly solar, which has increased from just 15 GW in 2013 to 178 GW in 2023.

This growth trajectory is driven by technological advances, declining costs, and a growing public commitment to decarbonisation.

The report also states that it will not be easy for the Trump administration to make changes to the renewable energy IRA: “Repealing or making significant changes to the IRA would be a challenge for any administration. Since the IRA is an enacted law, not a federal agency regulation or executive order, any substantial changes will require Congressional approval.”

Moreover, the current geopolitical climate, characterized by anti-China sentiment, presents significant opportunities for India.

As the United States aims to diversify its business partnerships, India’s existing business relationships in several industries, including software and pharmaceuticals, can facilitate a smoother transition to renewable energy collaboration.

Several Indian companies are already establishing manufacturing capabilities in the US, mitigating risks and positioning themselves to benefit from tax credits associated with renewable energy production.

The outlook for renewable energy in the US is promising, and India’s strategic advantages can significantly contribute to the growth of the sector. By fostering a strong partnership, both nations can advance their energy ambitions while addressing climate change and promoting sustainable development.