Indian solar panels are under scrutiny by the US for possible links with China's forced labor

U.S. Customs and Border Protection detained nearly 43 million dollars in electronics equipment shipments from India under a law that prohibits goods made using forced labor. This is a new focus of the agency, which enforces trade.

The Uyghur Forced Labor Prevention Act, which prohibits forced labor in Uyghurs, lists polysilicon as a sector of high priority. According to industry sources, solar panels are the most common type of equipment that has been stopped.

The CBP didn't immediately respond to our request for comment.

The law prohibits the sale of goods produced in China's Xinjiang Region, where Chinese authorities have reportedly set up labor camps for Uyghurs and other Muslim groups.

China denies all abuses.

In previous years, no Indian electronics shipments have been detained under UFLPA.

CBP reports that nearly a third (33%) of Indian electronics shipments detained were refused entry. CBP reports that only 5.4% of the shipments of top U.S. solar components suppliers from Malaysia, Vietnam, and Thailand were refused entry during this period.

The Indian detentions are a small part of the $3 billion worth of electronics CBP has stopped on the border in the past two years under the UFLPA.

They are a setback to Indian producers who were hoping to be seen as an alternative by U.S. solar developers tired of tariffs and UFLPA delays imposed on panels mainly made by Chinese companies.

Tim Brightbill is a trade lawyer at Wiley Rein LLP. He said that if the solar cells used in Indian panels come from China, there may be a reason for increased detentions. "It is my impression that Customs and Border Protection didn't realize that many Indian panels used Chinese solar cells for some time, and that the UFLPA risk was (and still is) high."

According to U.S. Trade data, imports of solar products have increased in India over the past few years. They reached $2.3 billion dollars last year.

According to S&P Global Market Intelligence, India will account for 11% (or more) of U.S. panels imported in the second quarter 2024. This is an increase of over two times its share from the previous quarter.

Even as recently as 2018, there were no solar panels imported from India.

According to a trade lawyer, the increased scrutiny of Indian shipments reflects the recent efforts of the border agency to expand UFLPA enforcement to include more than just the largest solar panel manufacturers in China. These companies have switched to polysilicon sources from the United States or Europe to avoid having their shipments detained.

Richard Mojica of Miller & Chevalier, a Washington-based trade attorney, said that Indian module manufacturers took advantage of the opportunity to import at a time where Chinese manufacturers were being held back by UFLPA.

Waaree Technologies, Adani Enterprises and Suntech are the two largest Indian solar suppliers in the U.S.

Adani's spokesperson confirmed that all of their shipments were released after some had been detained.

The spokesperson stated that "this outcome confirms that our imported products into the U.S. comply fully with UFLPA regulation, reinforcing the customer's confidence in the quality and reliability of our products, and the legal compliance of our manufacturing."

Waaree has not responded to any requests for comment. (Reporting and editing by Nichola Jackson, Lewis Jackson, and Bill Berkrot).

(source: Reuters)