China's decision to gradually reduce export tax rebates on solar products has created a significant opportunity for Indian solar manufacturers, with Waaree Energies leading the market response. The announcement has triggered substantial gains in Indian solar stocks as investors anticipate improved competitive positioning in global markets.

Market Response to Policy Change

Indian solar stocks responded positively to China's rebate reduction announcement, with key players experiencing notable gains:

The market rally reflects investor optimism about reduced Chinese competition and potential market share gains for Indian manufacturers in the global solar industry.

Details of China's Export Policy Changes

Beginning April 1, 2026, the Chinese government will implement significant changes to its export incentive structure. The Ministry of Finance announced the cancellation of Value Added Tax (VAT) export rebates for 249 goods, including major solar industry components such as solar cells, ceramic roof tiles, and lithium hexafluorophosphate.

Additionally, China will reduce export rebate rates for 22 battery-related goods, including lithium-ion batteries, from 9% to 6%, with complete elimination planned for January 1, 2027. This policy shift represents China's response to international trade pressures and concerns about overcapacity in its solar manufacturing sector.

Impact on Global Solar Market Dynamics

The rebate reduction addresses several critical issues in the international solar trade environment. China's export rebates reached nearly 2 trillion yuan ($286 billion) as of late 2025, contributing to aggressive pricing that many international competitors viewed as dumping. The policy change aims to normalize industry prices and profitability while reducing trade tensions with major trading partners including the United States, European Union, and India.

Market observers expect this move to accelerate the withdrawal of less competitive Chinese exporters who depend heavily on government rebates, potentially alleviating oversupply in international markets.

Opportunities for Indian Solar Companies

The policy change creates a more balanced competitive landscape for Indian solar manufacturers. Companies like Waaree Energies, which has extensive export operations and procures solar cells internationally, stand to benefit from both reduced input cost volatility and improved export competitiveness.

Premier Energies, despite its smaller size and limited export presence, remains positioned to benefit from global price normalization due to India's current reliance on imported solar cells and wafers for domestic manufacturing.

Broader Industry Implications

Beyond manufacturing companies, the policy change will affect solar project developers and EPC contractors including Adani Solar, Reliance Power, and Tata Power Solar. These companies have historically relied on low-cost Chinese solar components for their projects and may need to adjust their procurement strategies as Chinese product prices stabilize at higher levels.

The rebate reduction represents a significant shift in global solar trade dynamics, potentially opening new opportunities for Indian companies to expand their market presence both domestically and internationally as Chinese price advantages diminish.

Indian solar manufacturing stocks rebounded sharply on January 12, with Waaree Energies and Premier Energies climbing up to 5% after China announced significant policy changes affecting solar export subsidies. The rally marked a pause in weeks of steep losses for both companies as investors reacted positively to potential relief from Chinese pricing pressure.

Stock Performance on January 12

Both solar manufacturers posted strong gains in early trading:

China's Policy Shift Details

According to a Chinese finance ministry statement dated January 9, China will implement sweeping changes to its export tax rebate system. The policy changes include:

• Immediate Impact (April 1, 2025): Removal of VAT rebates for 249 products, including solar cells, ceramic roof tiles, and lithium hexafluorophosphate
• Extended Timeline (April 1, 2026): Complete cancellation of VAT rebates for photovoltaic and related products
• Battery Sector Changes: Reduction of rebate rates on 22 battery-related goods from 9% to 6%, with complete removal by January 1, 2027

Market Context and Recent Performance

The rally comes after both stocks experienced significant downturns. Chinese solar industries have been dealing with overcapacity and intense price competition, creating margin pressure globally for solar manufacturers.

Recent Trading Patterns

Strategic Implications

While Premier Energies does not have significant exposure to export markets, Waaree Energies maintains a presence in international markets, making the Chinese policy shift particularly relevant for the latter company. The removal of Chinese export subsidies could potentially level the playing field for Indian manufacturers competing in global markets.

Both companies are relatively new entrants to the futures and options segment, adding to the volatility in their stock prices. The policy announcement represents a potential turning point for the sector, which has been under pressure from subsidized Chinese competition.