India’s goal of reaching 500 GW of non-fossil fuel capacity by 2030 relies largely on solar power, which is expected to contribute more than half of this capacity. As of March 31, 2025, India has installed approximately 106 GW of solar capacity, according to the Ministry of New and Renewable Energy (MNRE). To achieve its 280 GW solar target by 2030, the country must accelerate its pace, adding 35-40 GW of new capacity annually.
Achieving this scale of solar capacity installation also requires robust domestic manufacturing supply chains. The growing demand requires significant expansion in the domestic production of critical solar components including modules, cells, ingots and wafers.
Currently, India faces significant challenges in meeting solar demand through domestic production. The country’s solar manufacturing sector continues to rely on imports, especially from China. To reduce imports from other countries and meet its goals in a sustainable manner, the government has been promoting the local manufacturing of solar components.
Renewable Watch provides an overview of the current status of domestic solar manufacturing in India, key policy initiatives, challenges and opportunities in India’s solar domestic manufacturing sector…
Current status
In its pursuit of self-reliance and stronger domestic manufacturing, India has been actively working to reduce solar imports while promoting exports. As per a Lok Sabha response dated April 2, 2025, solar photovoltaic cell and module imports have seen a notable decline over the past few years. In 2021-22, imports were valued at approximately $4,501 million, which dropped to around $2,489 million by December 2024. At the same time, India’s solar exports have surged. Indian PV manufacturers exported around $2 billion worth of PV modules in 2023-24, marking a more than 23-fold increase in export value between 2021-22 and 2023-24, as per the Institute for Energy Economics and Financial Analysis.
This can be attributed to significant growth in domestic manufacturing capacity. As per the latest update to the Approved List of Models and Manufacturers (ALMM), India’s solar module manufacturing capacity stood at 74 GW as of March 2025, a sharp increase from just 7 GW in March 2020. This impressive growth has been accompanied by significant technological advancements, with the industry shifting from primarily low-efficiency polysilicon modules to more advanced and efficient technologies such as mono PERC, TOPCon and heterojunction modules.
Further, according to Lok Sabha questions (April 2, 2025), the country’s current solar PV cell manufacturing capacity stands at approximately 25 GW. India has also established around 2 GW of ingot and wafer manufacturing capacity, reinforcing its focus on vertical integration in the solar segment.
Policy measures
The central government has taken significant steps to enhance domestic solar manufacturing and reduce dependence on imports. These efforts include imposing tariffs such as basic customs duties (BCDs) and implementing non-tariff measures such as domestic content requirement (DCR) and ALMM. Furthermore, in April 2021, the government launched the production-linked incentive scheme, with a total budget of Rs 240 billion, to promote the production of high-efficiency solar PV modules. Letters of award have been issued under the scheme for setting up 48,337 MW of fully/partially integrated solar PV module manufacturing units in two phases.
In Union Budget 2025-26, the duty on solar cells and modules has been reduced from 25 per cent and 40 per cent to 20 per cent each respectively. In addition, an exemption of customs duties has been granted for the import of select goods used in the manufacturing of solar PV cells, modules and their components. This measure is aimed at lowering the cost of establishing solar PV manufacturing facilities in India, improving the price competitiveness of domestic producers and reduce dependence on imports. However, the government has retained duties on items such as solar glass and tinned copper interconnects to ensure a level playing field for domestic manufacturers competing with foreign suppliers in the Indian market.
Apart from this, several ongoing schemes of the MNRE, such as the central PSU scheme Phase II, the Pradhan Mantri Kisan Urja Suraksha evam Utthaan Mahabhiyaan Components B and C and the PM Surya Ghar: Muft Bijli Yojana, mandate the procurement of solar PV cells and modules from domestic manufacturers under DCR norms.
In addition, the ALMM was reinstated in April 2024 after a series of policy reversals during 2023-24, which stemmed from inadequate domestic module manufacturing capacity at the time. Since the reimplementation of the ALMM, there has been a significant scale-up in module production across the country.
Furthermore, to support domestic solar cell manufacturing, the MNRE has announced the inclusion of solar PV cells in the newly introduced List II under the ALMM. From June 1, 2026 onwards, projects that are required to use ALMM-enlisted solar modules from List I must also ensure that these modules are manufactured using solar cells under List II. In fact, net metering and open access renewable energy projects required to use ALMM-listed modules must also comply with List II requirements after June 2026, unless commissioned before the cut-off date.
Further, in March 2025, the MNRE issued updated DCR norms for solar cells, specifying that only those based on crystalline silicon technology and manufactured in India using undiffused silicon wafers (black wafers) will qualify as domestically produced.
Capacity expansion
These targeted policy measures have resulted in a series of new projects in the solar manufacturing sector. For instance, in October 2024, the Avaada Group laid the foundation for a new manufacturing facility at the Butibori Industrial Park in Nagpur. In December 2024, Rays Green Energy Manufacturing announced plans to establish a solar module and cell facility in Madhya Pradesh. The facility will feature a 1.5 GW solar cell plant and a 3 GW solar module assembly line. In the same month, Insolation Energy Limited acquired 45 acres of land from the Madhya Pradesh government to establish a solar manufacturing facility. The proposed unit will feature a production capacity of 3 GW for solar cells, 4 GW for solar modules and 24,000 metric tonnes of aluminium frames.
In February 2025, TP Solar Limited inaugurated a 4.3 GW solar cell and module manufacturing facility in Tirunelveli, Tamil Nadu. Meanwhile, Gautam Solar established a new solar module manufacturing facility in Haryana. Furthermore, Grew Solar has initiated the development of a 3 GW solar cell and module manufacturing facility in Narmadapuram, Madhya Pradesh, with an investment of Rs 30 billion. In March 2025, Waaree Energies Limited commissioned a 5.4 GW solar cell manufacturing facility in Gujarat. In the same month, Goldi Solar launched an artificial intelligence-powered solar module manufacturing line at its newly built facility in Gujarat. The facility is designed for a planned production capacity of 14 GW. Meanwhile, the Avaada Group inaugurated a 1,500 MW solar module manufacturing facility in Dadri, Noida, with a focus on TOPCon N-type bifacial glass-to-glass modules. In April 2025, Inox Solar received a land allotment from the Odisha government in Dhenkanal district for establishing a 4.8 GW solar cell and a 4.8 GW solar module manufacturing plant.
Outlook
According to the Indian Solar Market 2023 report by the National Solar Energy Federation of India, India’s module and cell manufacturing capacities are projected to reach 150 GW and 100 GW, respectively, by 2028. The country’s entire solar supply chain, including modules, cells, wafers, ingots and polysilicon, is expected to scale up to 400 GW. However, achieving these ambitious targets will require addressing several critical challenges.
One of the major hurdles has been the policy uncertainty surrounding the implementation of the ALMM over the past year. While the ALMM has now been implemented in the solar segment, the prolonged policy uncertainty has impacted developers, manufacturers and long-term investors. Furthermore, the country’s solar manufacturing capacity remains constrained, with limited production of solar cells and negligible domestic capacity for polysilicon, wafers and ingots. As a result, the solar industry continues to rely heavily on imports of modules and upstream components.
The introduction of ALMM List-II could further complicate matters in the short term by increasing costs and causing delays in project execution. Additionally, while BCD was introduced to make imported solar cells and modules costlier and promote domestic manufacturing, the absence of a defined sunset period has raised concerns. The lack of clarity on the duration of BCD applicability creates uncertainty for both developers and manufacturers, who lack the long-term policy visibility needed to plan their investments.
Despite these challenges, the sector presents tremendous opportunities, especially in light of India’s expanding solar demand. One, the rapid growth of large-scale solar parks and rooftop solar systems is driving sustained demand for solar modules and related components. Two, Union Budget 2025-26 announced the launch of a National Manufacturing Mission to promote the Make in India initiative. A key focus of this mission will be cleantech manufacturing, with an emphasis on enhancing domestic value addition and building a robust solar PV manufacturing ecosystem. Three, as India’s solar cell manufacturing capacity scales up, supported by mechanisms like ALMM List-II, it is expected to play a crucial role in achieving energy self-reliance, reducing foreign exchange outflows on renewable energy imports and generating employment across the clean energy value chain.
In conclusion, there is a need to bridge the significant gap between India’s solar deployment plans and available domestic manufacturing capacity. Going forward, policy implementation should be gradual and adaptive. A well-calibrated, policy approach, rather than abrupt roll-outs, is essential to avoid disrupting sectoral growth and ensure a smooth, balanced transition towards self-reliance.
Sakshi Bansal
