China's proposed export controls on 12 vital photovoltaic manufacturing technologies could heighten execution risks in solar cell manufacturing, according to a report by India Ratings and Research (Ind-Ra).

Holding over 75% of the global solar supply chain, China plans to restrict the export of these technologies—citing their dual-use applications in defense, aerospace, and other sensitive sectors—by requiring export licenses. Ind-Ra noted that similar licensing controls on high-end construction machinery, such as tunnel boring machines (TBMs), pose operational risks for engineering, procurement, and construction (EPC) companies.

The rating agency emphasized that while India is already heavily reliant on China's supply chains, this latest development underscores a growing vulnerability to technology dependence. Consequently, these technology transfer restrictions could disrupt the timelines for the Approved List of Models and Manufacturers (ALMM) Phase II policy. This disruption risks upsetting the supply-demand dynamics for Domestic Content Requirement (DCR) cells, which would directly affect market pricing and manufacturer profitability. The ALMM-II framework mandates that solar project developers source domestically produced cells from certified manufacturers.

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"The proposal, if implemented, could slow down capacity addition for backward integration. Companies with already secured supplies are less likely to be impacted than those planning to enter capex cycle now. Backward integration in ingots and wafers might also face delays and/or cost escalations," said Bhanu Patni, Director, India Ratings & Research. He added that domestic players expanding along the value chain have historically relied on government backing, making continued policy support vital for sustaining capital expenditure and maintaining healthy margins for debt servicing.

Industry leaders also weighed in on the fallout:

• Volks Energie CEO Piyush Goyal suggested the government should fund a mission for indigenous equipment, PLI support to technology ownership, and look for partnership with Japan, Korea and Europe, and build a deep bench of cell-line engineers.
• Sunkind India MD Hanish Gupta said the final impact will depend on regulations, licensing provisions and availability of alternative technology partners, but the country must take China's proposal as a "wake-up call". He stressed that diversifying supply chains and fostering domestic technology development have now become essential for the sector.