In the hinterlands of eastern Uttar Pradesh and Bihar in the Indian heartland, there are few reasons for optimism. Trains wind their way across the plains at speeds barely improved in 30 years, while many roads have worsened. Jobs are scarce. Unemployed young people sit listlessly in the shade. Yet in some places, the evaporation of irrigation canals in place since British times has slowed thanks to solar panels placed above them.
More importantly, these have meant that villages in remote areas have electricity for the first time. Solar energy has been a great success story in India at a time when cities such as Delhi, which borders Uttar Pradesh, have been choking on the foul air caused by their dependence on thermal power, generated by plants that burn dirty coal and lack the most modern scrubbing technology. While the pricing of solar energy does not always measure the cost accurately, it is fast becoming competitive with coal-fired power plants. Or at least that seemed to be the case until January, when Narendra Modi’s government announced it planned to introduce 70 percent tariffs on solar panels imported from several countries — but mostly directed against China. India barely has a solar panel manufacturing industry.
Indeed, with a few exceptions, it doesn’t have much manufacturing at all. The prime minister’s much-vaunted “Make in India” campaign hasn’t really happened. So, in some ways, India’s latest protectionist thrust is understandable. Manufacturing has historically been the way developing economies grew and their people prospered. India needs to create 1m jobs a month to absorb its young people as they move from rural villages. Yet, before the government stopped releasing data last year, India was creating fewer than 1m jobs a year, and many of them low-end service posts.