Background and Formation of the ISA
- International Solar Alliance was established in 2015 to promote affordable solar adoption in developing countries.
- The Alliance is headquartered in India and jointly led by India and France.
- It focuses on mobilising finance, reducing investor risks, and accelerating deployment, not building plants directly.
- The ISA has over 120 member countries, spanning Africa, Asia, and island nations.
- The United States joined in 2021 and contributed approximately $2.1 million over three years.
U.S. Withdrawal and Institutional Impact
- On January 7, the U.S. announced withdrawal from 66 international organisations, including the ISA.
- U.S. funding accounted for only about 1% of total ISA resources.
- Indian officials confirmed continuity of programmes, training, and capacity-building activities.
- The exit primarily affects confidence and perception, not the Alliance’s operational finances.
Implications for India’s Solar Manufacturing
- India’s solar power costs remain stable as the country does not rely on U.S. equipment supplies.
- By late 2025, India’s solar module manufacturing capacity reached approximately 144 gigawatts.
- Solar cell manufacturing stood near 25 gigawatts, with rapid expansion across the supply chain.
- China dominates global production with 70% of cell manufacturing capacity worldwide.
- India imported $1.7 billion worth of photovoltaic modules from China in FY25, as per MNRE data.
Investment and Employment Effects
- Domestic solar projects are driven by long-term power contracts and rising electricity demand.
- Funding largely comes from Indian banks, global funds, and development institutions, not the U.S.
- Employment is concentrated in manufacturing, installation, and operations within India.
- Expanding domestic production helps protect jobs from international climate policy shifts.
External Risks and Global South Impact
- ISA activities in Africa and poorer developing countries depend on concessional finance and cooperation.
- Reduced U.S. engagement may make international lenders cautious and delay project approvals.
- Slower overseas solar growth could affect Indian firms expanding into emerging markets.
Strategic and Diplomatic Dimensions
- ISA remains a key instrument of India’s climate diplomacy and Global South leadership.
- U.S. exit removes an influential partner but does not alter India’s leadership role.
- India faces greater responsibility in sustaining international confidence and financing flows.
Outlook
- India’s domestic solar sector remains cost-stable, investment-secure, and employment-resilient.
- The broader challenge lies in a fragmented global climate cooperation environment.