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Ethiopia, long known for its coffee, has found a new calling card in solar photovoltaic (PV) cells, albeit one under scrutiny for possible Chinese links.
India’s renewable energy ministry has asked the finance and commerce ministries to look into an exponential surge in solar PV cell imports from Ethiopia, suspecting Chinese manufacturers are dumping low-priced products in India.
The ministry of new and renewable energy’s (MNRE) concerns stem from solar PV cell imports from Ethiopia ballooning from zero to $202 million in 2025-26, accounting for 81% of New Delhi’s total imports from the country at $248.51 million, according to commerce ministry data. Overall bilateral trade stood at $686.67 million.
In the current fiscal year through May, imports of solar PV cells from Ethiopia totalled $29.63 million.
“This could be on account of recent additions in solar PV cell manufacturing capacities in Ethiopia and comparatively favourable duty treatment to solar cell exports from Ethiopia to India vis-à-vis solar cell exports from China to India,” said an MNRE official in response to Mint’s emailed queries.
The MNRE has sought the intervention to determine whether existing trade rules are being circumvented through free trade agreements (FTAs) or least developed country (LDC) benefits, including exemptions from the basic customs duty on solar PV cells, the official added.
“Circumvention of goods in violation of country-of-origin norms is always a matter of concern, regardless of the product or the country flouting such norms,” the official said.
Country-of-origin norms, or rules of origin, are the laws and criteria used to determine a product’s economic nationality, applied when a product uses parts from multiple nations.
In February 2025, the Indian government imposed a basic customs duty of 20% on all imported solar cells and modules, especially from China, to protect the interests of the $12 billion domestic solar equipment manufacturing industry.
New Delhi also maintains an Approved List of Models and Manufacturers (ALMM) for the clean energy sector, under which only approved equipment is eligible for government-backed schemes, including projects from which power distribution companies procure electricity for consumers.
However, if cells are imported to manufacture modules for exporting under the Advance Authorisation Scheme, the applicable customs duty can be exempted or deferred.
Ethiopia has rapidly emerged as a solar-cell manufacturing hub because of cheap hydroelectric power and low labour costs.
Even US imports of Ethiopia-origin crystalline silicon photovoltaic (CSPV) cells and modules surged to $277 million in the second half of 2025 from virtually zero before July 2025, prompting the US Department of Commerce to initiate a circumvention inquiry in July.
The inquiry will determine whether CSPV cells produced in Ethiopia using Chinese-origin parts and components, and exported either directly to the US or after being assembled into modules in Vietnam, are circumventing existing anti-dumping and countervailing duty orders on Chinese solar cells.
The US also imposes steep anti-dumping and countervailing duties on solar products from China and targeted supplies from Cambodia, Malaysia, Thailand, Vietnam, India and other Asian manufacturing centres.
Vineet Mittal, chairman of Indian clean energy conglomerate Avaada Group, said the sharp rise in PV cell imports from Ethiopia in a very short period certainly merits careful examination.
“Any sudden emergence of a large manufacturing and export base, particularly in a sector that is highly integrated with global supply chains, warrants a review to ensure that the spirit and intent of India’s trade policy measures are being fully complied with,” he said.
India has erected tariff and non-tariff barriers, including prior import approval requirements, particularly in strategic sectors, as part of a broader economic response to Chinese aggression along the border. But Chinese businesses find ways around things, according to experts.
“Chinese businesses find markets where they can diversify. Ethiopia is also a BRICS (member) country, so it allows Beijing to make a case that it is helping BRICS countries. It is a smart move, unless it doesn’t work,” said Manoj Kewalramani, chairperson, geostrategy programme at Bengaluru-based Takshashila Institution.
Brics is an international group of emerging market countries. It includes 11 full member nations: Brazil, Russia, India, China, South Africa, Egypt, Ethiopia, Iran, Saudi Arabia, the United Arab Emirates, and Indonesia.
As one production location after another comes under investigation, companies look for new countries not covered by these measures. Ethiopia has emerged as one such location, said Ajay Srivastava, founder of private research group Global Trade Research Initiative (GTRI).
“China plays a central role in this emerging supply chain as factories there depend heavily on Chinese or Chinese-linked silicon wafers, machinery, technology and other inputs. These materials are processed into solar cells using Ethiopia’s inexpensive electricity and then exported as Ethiopian-origin products,” he said.
While the production surge may represent genuine manufacturing and value addition, it could also include tariff-driven relocation, limited processing or rerouting of Chinese-origin goods, he added.
Vinay Rustagi, chief business officer at integrated solar cell and module manufacturer Premier Energies, doesn’t expect imports from Ethiopia to last very long, noting that most of the Ethiopian cells were used to make and export solar panels to the US.
“Companies are trying to find tactical solutions in response to changing trade regimes,” he said.
Also, Chinese imports remain the main headache, according to Gayettri Dixit, assistant professor at the Centre for African Studies, Jawaharlal Nehru University (JNU). “Ethiopia’s solar import base is increasing for sure, but it won’t change India’s clean energy supply chain radically, as China is still a dominant player.”
New Delhi’s solar PV cell imports nearly doubled to $3.05 billion over the past two fiscal years, according to commerce ministry data. Imports from China alone rose 37% to $1.8 billion in FY26 from $1.3 billion in FY25, while solar cell imports from China stood at $257.1 million in the current fiscal.
Overall, China remained India’s second-largest trading partner after the US in FY26, with bilateral trade of $151.104 billion. The widening trade deficit with China continues to be a concern for Indian authorities.
Mint‘s queries emailed to the embassies of Ethiopia and China in New Delhi, India’s ministries of finance, commerce and industry, and external affairs, and the US Department of Commerce remained unanswered.
Developing domestic capacity is key, Dixit said. “India should work on its core strategy, like domestic capacity, and look at other sources for the imports as well. Solar manufacturing has also become a strategic industrial alignment. Real strength comes from domestic manufacturing; tighter rules of origin are important as well.”
The country has solar cell and module capacities of 25 gigawatts and 172 gigawatts, respectively.
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