US Solar Expansion Spurs $2 Billion Indian Imports, Raises Red Flags Over China Concerns, Says Report

US initiatives aimed at fueling the development of India's solar industry might inadvertently create an avenue for the infiltration of components produced through forced labor in China.

India's top solar producer, Waaree Energies Ltd., supplied millions of panels to the US with components from China's Longi Green Energy Technology Co., previously barred from the US due to forced labor worries. Longi's solar cells, made in Malaysia and Vietnam, are used in Waaree panels in Texas and other state solar farms, as per a report by Bloomberg.

US Customs and Border Protection's enforcement of the Xinjiang ban on solar panels prompts questions regarding Waaree panel imports. The agency has detained shipments from Chinese-owned firms since June 2022, requiring evidence of Xinjiang-free supply chains to overturn interventions.

However, the focus on China has opened a window for Indian solar producers. They exported nearly $2 billion worth of panels to the US in the initial 11 months of the previous year, marking a fivefold surge compared to the entire 2022, as per BloombergNEF data.

On the flip side, the Congress passed the Uyghur Forced Labor Prevention Act (UFLPA) in December 2021 due to international worries about the alleged incarceration and forced labor of Uyghur minority members in Chinese factories. The Chinese government refutes allegations of human rights abuses in Xinjiang, asserting that its policies focus on education, countering extremism, and reducing poverty.

Some members of Congress and industry groups have criticized US Customs for uneven enforcement of the UFLPA, which covers various products. The value of detained apparel and textiles dropped 52 per cent in the first seven months of 2023, while intercepted electronics rose by 6 per cent, according to the National Council of Textile Organizations.

Customs employs a risk-based approach to enforcement, detaining $2 billion worth of primarily solar products since June 2022. The focus has shifted to solar products from Southeast Asia, where Chinese companies moved production to avoid US tariffs. Indian solar products have not been detained yet, but analysts criticize the targeted enforcement against Chinese firms.