India's Solar Surge

India is building up its domestic solar photovoltaic (PV) manufacturing. With supportive policies, rising domestic demand, and a global push to diversify renewable energy supply chains away from dependence on China, India is working towards solar manufacturing autonomy.

China has become the dominant manufacturer and supplier of clean energy technology, leading its customers to adopt a “China+1” strategy to safeguard against potential disruptions, such as export bans or tariffs. Relying on a single country for critical energy supplies poses a security risk, as demonstrated by Europe's dependence on Russian gas during the invasion of Ukraine in 2022. This diversification strategy could prove to benefit Indian PV solar in the long run.

Well ahead of its 2030 Paris Agreement target, India achieved 50% of its installed electricity capacity from non-fossil fuel sources. It has now updated its aim and intends to reach 500GW of clean energy by 2030. Meeting this ambitious goal will require a significant increase in solar power capacity.

As Sadhasivam Durairaj, a Solar PV Module specialist, highlights, “Photovoltaic (PV) technologies have significantly shaped the solar energy industry by driving down costs…These developments have made solar power a more competitive and feasible energy source, helping to drive a global shift toward renewable energy.” These technological advances further empower India’s ambitions to become a key player in the global solar market, leveraging its growing manufacturing base and favorable policy environment to meet domestic demand and potentially establish a stronger presence in international markets in the future.

In the last five years, India has seen one of the highest increases in power generation capacity, surpassed only by China and the US, with notable growth in PV solar investment. Despite ambitions to become a global leader in solar panel manufacturing, it still relies heavily on China, which holds foundational control over key solar materials and components: polysilicon, the raw material used to produce solar panels; ingots, large blocks of purified silicon that are sliced into thin wafers used to manufacture cells; PV cells, the individual units that convert sunlight into electricity; and solar modules or panels, assemblies of multiple solar cells. China not only dominates solar manufacturing but also has cemented itself as an indispensable part of the supply chain. 

Durairaj points out, “Materials such as metallurgical-grade silicon, glass, and aluminium are significantly reliant on China in the global solar panel supply chain. High demand has impacted global availability, resulting in supply chain bottlenecks.” According to a report by analytics provider Rubix, in FY 2022, China supplied an overwhelming 94% of India’s total solar PV cell imports and 93% of module imports, but by FY 2024, its share declined to 56% for PV cells and 65% for modules. This trend is predicted to continue as India moves toward greater self-sufficiency.

Three key players are behind India’s efforts to become independent: Adani, Waaree, and Vikram, who “already dominate the module market and are planning integrated supply chains,” says Neshwin Rodrigues, an energy analyst at Ember. Several secondary players have also found success, including ReNew Power, Solex Energy, Grew Energy, Navitas, and Saatvik Energy. However, Rodrigues points out that the high costs associated with research and development in upstream manufacturing create a significant barrier, often giving an advantage to established leaders. He explains, “It’s unlikely that new entrants can compete in India’s solar module space, though there may be opportunities in cells and, eventually, other upstream segments,” adding that “upstream manufacturing is more capital-intensive, making it a higher-risk play.” 

Mr. Gautam Mohanka, Director at Gautam Solar, a prominent Indian solar module manufacturer, highlights the policy push behind domestic solar growth: “The Government of India—through the Ministry of New and Renewable Energy (MNRE)—has introduced a range of supportive policies aimed at strengthening domestic capabilities”. The Approved List of Models and Manufacturers (ALMM) is a certified list of manufacturers that allows companies to qualify for government subsidies, including PM-KUSUM, PM Surya Ghar, and rooftop solar schemes. This heavily favours Indian manufacturers as foreign companies are not included on the list. Additionally, ALMM will be updated to include solar cells by 2026, meaning solar cell manufacturers will need to be ALMM-listed for projects to qualify for government subsidies.

That said, this will require India to scale up its cell production or risk project delays and cost inflation. This has been coupled with Basic Custom Duty (BCD), an import tax of 20% on both cells and modules. Intended to level the playing field for Indian manufacturers, who have higher production costs compared to their Chinese counterparts, these tariffs are a temporary shield as domestic firms may struggle once tariffs are reduced or bypassed through free trade agreements (FTAs) with countries, including those in ASEAN. Lastly, the Production Linked Incentives (PLI) is a financial stimulus targeted at large manufacturers to develop a self-reliant supply chain, producing their own ingots, wafers, and cells.

Only China and the US have seen a higher increase in power generation capacity in the last 5 years. The Indian solar industry is well placed to grow alongside.

India attracted the most clean energy funding from Development Finance Institutions (DFIs) in 2024, receiving 2.4 billion USD, reflecting strong international confidence in India’s clean energy sector. The country allows for 100% foreign direct investment FDI into energy production and grid infrastructure, excluding nuclear, and has seen a steady increase in achieving nearly 5 billion USD in 2023, almost twice the amount recorded before Covid.

Additionally, the cost of capital for grid-scale renewable energy projects is relatively low compared to other emerging markets. This makes India one of the more attractive destinations for renewable energy investment within developing economies. However, despite this progress, the cost of capital in India remains approximately 80% higher than in advanced economies, making the financing of large-scale renewable projects significantly more expensive in comparison. 

Like most of India’s economy, PV solar production relies on domestic demand. But Waree, Adani, and Vikram have ventured out, exporting over half of their manufactured products in FY 2024. In FY2024, 99% of India's exported PV solar energy was sent to the US. While Trump’s initial tariffs, at 145% on China and cumulatively 3,500% on Southeast Asia, might have been cause for celebration among India’s solar producers, the situation has reversed as both countries’ tariff rates have gradually decreased.

Meanwhile, Trump announced that the US would impose 25% tariffs on India starting August 2, 2025, with threats to increase this to 50% by August 27, 2025, placing India at a significant disadvantage compared to its export competitors. 

While the tariffs remain uncertain, with Trump reversing and applying new rules every month, Rodrigues addresses concerns around potential price wars if China redirects its excess solar supply to India following US tariff hikes on China. He explains, “India is unlikely to roll back protective measures like the Basic Customs Duty (BCD), the Approved List of Models and Manufacturers (ALMM), and the upcoming Approved List for Cell Manufacturers (ALCM). As long as these remain in place, large projects will have to use domestically made panels—and eventually cells—limiting the scope for direct Chinese imports. Moreover, China currently exports very little solar PV directly to the U.S., so any ‘excess’ supply redirected to India might instead come via manufacturing bases in Vietnam, Malaysia, or Thailand, where several Chinese companies operate.” 

India has the policy momentum, industrial base, and global demand signals in its favor. But closing the upstream manufacturing gap and developing an international export market solution is essential. Developing a fully integrated supply chain will require substantial investment, technological innovation, and continued government support.