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How Middle East Crisis Is Driving Up Solar Costs In India? Photograph: (AI)
India’s leading solar manufacturers are increasingly pointing to the ongoing tensions in the Middle East and West Asia as a major reason behind rising raw material costs, volatile freight rates and fresh supply-chain disruptions. At the same time, many in the industry now believe the crisis could accelerate the global shift towards renewable energy and domestic manufacturing.
Executives from companies such as Premier Energies, Vikram Solar, Solex Energy, Shakti Pumps and Emmvee, during their recent FY26 earnings calls, spoke about how geopolitical instability is beginning to influence everything from procurement and pricing to exports and long-term expansion plans.
In several of the recent remarks made during the latest earnings call, the top leadership has explained the direct and indirect impact of the crisis on the Indian solar manufacturing landscape. The leadership also sees this as a golden moment to shift the focus more towards the growth of renewable energy in India. Premier Energies Managing Director Chiranjeev Saluja told his investors that the ongoing crisis is forcing countries to rethink their dependence on fossil fuels.
“The Middle East crisis is turning into a moment for renewables, as all stakeholders look to rethink energy mix and reduce consumption of fossil fuels,” Saluja said during the company’s FY26 earnings call. “We believe this is going to provide a major boost to long-term demand for the sector.”
Vikram Solar Chairman and Managing Director Gyanesh Chaudhary expressed similar concerns, saying recent geopolitical events have exposed the risks of relying heavily on imported energy. “The geopolitical disruptions for the past 2 years, most recently in West Asia, have reinforced one reality; for import-led economies like India, energy dependence is now a structural risk,” Chaudhary said.  He added that disruptions in “oil, gas and freight routes” are no longer temporary issues but are increasingly becoming “a permanent feature of the global system.”
Most companies acknowledged that the conflict has already begun affecting costs. Solex Energy CMD Chetan Shah said logistics costs had risen sharply because of the geopolitical situation. “Mainly it is a logistic cost which has increased,” Shah said, adding that crude oil-linked materials such as EVA and other plastic-based inputs had also become more expensive.
He also admitted that the situation remained highly unpredictable, with the company staying in constant discussions with customers over rising prices. “Current situation is so uncertain,” Shah said while referring to pricing volatility and supply-chain concerns.
Premier Energies also cited higher commodity and freight prices as key challenges during FY26. The company said it had deliberately built up raw material inventory to avoid future disruptions. “Because of the Middle East crisis, we have stocked up on raw materials,” the management said.
Vikram Solar also acknowledged that the war had started impacting costs directly. “We experienced some increase in the crude oil, which impacted the EVA cost,” the company said, while also highlighting rising aluminium prices. The company’s CFO Ranjan Jindal, added, “The cost actually went up by INR 0.80” because of “the impact of the war coming in.”
Shakti Pumps disclosed that geopolitical tensions had already started affecting export activity. “During Q4, exports were temporarily affected due to delays in order placement amid geopolitical tensions in the Middle East,” the company said. The company also said higher freight and logistics costs linked to “ongoing global geopolitical disruptions” weighed on margins during the quarter.
Chairman Dinesh Patidar said rising prices of copper, stainless steel and silicon sheets had significantly impacted profitability. “The margins this year have been affected by increased raw material pricing due to the geopolitical situation,” Patidar said. According to the company, raw material inflation alone impacted quarterly profitability by around 6–7%.
Another clear trend emerging across the industry is the push towards localization and backward integration to reduce dependence on global supply chains. Emmvee said solar supply chains across the world are being reshaped as countries focus more on domestic manufacturing.
“Markets are becoming more selective, supply chains are being reconfigured and domestic manufacturing capability is becoming increasingly important across regions,” the company said. CEO Suhas Manjunatha added that the company had already diversified sourcing away from China-linked supply chains. “We already have an existing alternate supply chain to China in every material that we use,” he said.
Companies including Solex Energy, Premier Energies and Vikram Solar also highlighted ongoing investments in solar cells, wafers, battery energy storage systems (BESS) and backward integration projects to improve supply-chain resilience and reduce external dependence.
Summing up the changing industry mindset, Vikram Solar’s Chaudhary said: “Solar is no longer being pulled by incentives; it is being pushed by policy, by supply chain realignment, and by energy security.”
Despite near-term cost pressures, most companies remained optimistic about the long-term outlook for renewable energy demand, arguing that concerns around fuel security and supply-chain fragility could ultimately strengthen the case for solar energy globally.
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