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India’s solar photovoltaic (PV) module manufacturing capacity has risen to 100 gigawatts (GW) by August 2025 from less than 3 GW in 2014, but the sector remains heavily dependent on imports for critical upstream inputs such as polysilicon and wafers, according to the government’s think tank.
The report, Key Sectors to Position India as a Global Manufacturing Hub, by NITI Aayog and Crisil Intelligence that identified as one of 12 sectors with the potential to position India as a global manufacturing hub says India’s domestic solar market was estimated at Rs 32,400 crore, or $3.7 billion, and is projected to grow at a compound annual growth rate of 17 to 20 per cent between fiscal 2023 and fiscal 2030.
India had installed 106 GW of solar capacity by March 2025 and needs to add about 174 GW to reach its 2030 target of 280 GW. Demand is expected to be supported by utility-scale solar, rooftop projects, open access installations and green hydrogen-linked demand.
The global backdrop is favourable for the sector. Renewable energy’s share in electricity generation is expected to rise from 30 per cent in 2023 to 46 per cent by 2030, largely driven by solar and wind. Solar already accounted for about 46 per cent of global installed renewable power capacity at the end of 2025, compared with about 25 per cent each for hydropower and wind, according to the International Renewable Energy Agency (IRENA).
The global PV manufacturing industry remains highly concentrated in China, which accounts for more than 85 per cent of global manufacturing capacity. In 2024, China accounted for 93 to 98 per cent of installed and new polysilicon production, 95 per cent of wafer capacity, 91 per cent of cell capacity and 82 per cent of module capacity.
China’s dominance followed an early policy push. The Chinese government identified PV manufacturing as a strategic industry in 2009 and supported the sector through low-cost debt, subsidies, tax incentives, research and development (R&D), industrial incentives and skilling programmes. China’s PV manufacturing capacity increased more than 18,000 times between 2004 and 2024. Its share of global PV exports was about 57 per cent in 2024.
China’s share of global PV exports of cells and modules stood at 59 per cent in calendar year 2024 and 64 per cent in the first half of 2025, while Vietnam, Malaysia, Thailand, Cambodia, Indonesia, Laos and India together accounted for 28 per cent.
Vietnam has also emerged as a significant manufacturing base, accounting for 10 per cent of global PV exports in 2024. Its growth has been supported by free trade agreements, tax incentives, import duty exemptions, streamlined approvals, power purchase agreement incentives and skilling programmes. Chinese companies have also expanded manufacturing operations in Vietnam.
India’s PV manufacturing capacity has expanded sharply, particularly in modules and cells. Module capacity increased from about 2.3 GW in 2014 to 100 GW by August 2025, while cell capacity rose from less than 1.2 GW in 2014 to 25 GW by March 2025. Wafer capacity stood at about 2 GW as of March 2025.
The report, however, says this expansion has largely occurred in the downstream portion of the value chain. The PV manufacturing chain comprises polysilicon production, ingot and wafer production, cell fabrication and module assembly. India’s dependence on imports remains close to 100 per cent for polysilicon, above 90 per cent for wafers, above 60 per cent for cells and above 40 per cent for modules, based on available supply after exports.
China remains a major source of this dependence. Nearly 59 per cent of India’s photovoltaic cell and module imports in 2024 were attributed to China. Vietnam, Thailand and Malaysia together accounted for 14 per cent of India’s PV imports in fiscal 2025, reflecting efforts to diversify supply chains.
India imported modules and cells worth Rs 32,200 crore, or $3.8 billion, during the first 11 months of fiscal 2025, down from Rs 51,500 crore, or $6.2 billion, in fiscal 2024. The report attributes the decline partly to the reimposition of the Approved List of Models and Manufacturers (ALMM).
The government has used a combination of the ALMM, basic customs duty (BCD), the Production Linked Incentive (PLI) scheme and other measures to build domestic manufacturing capacity.
The PLI scheme has two tranches, with an outlay of Rs 4,500 crore, or $510 million, in the first tranche and Rs 19,500 crore, or $2.2 billion, in the second. Together, the scheme has awarded 48 GW of integrated PV manufacturing capacity.
The ALMM has helped create a domestic market for locally manufactured products. As of October 13, 2025, the Ministry of New and Renewable Energy (MNRE) had listed 93 domestic module manufacturers with a combined capacity of 116,500 megawatts. The September 2025 update to ALMM List II included 11 domestic cell manufacturers with a combined capacity of 17,880 MW.
The government has also proposed deeper backward integration. MNRE has proposed mandating the use of India-made wafers under ALMM from June 1, 2028, through a proposed ALMM List III for wafers. The proposed framework requires modules to use ALMM-listed cells and those cells to use ALMM-listed wafers.
The report notes that the ALMM mandate for modules helped India’s module manufacturing capacity cross 100 GW in a little over four years, while the first ALMM List II for cells included 13 GW of manufacturing capacity when it was released in August.
The report says increasing upstream manufacturing capacity will be critical as domestic solar demand expands. The Central Electricity Authority’s National Electricity Plan Transmission Plan 2024 projects India’s solar installations to reach 365 GW by fiscal 2032, implying demand for 283 GW between fiscals 2025 and 2032.
However, more than 80 per cent of the value of the PV manufacturing chain, along with the necessary capital goods, is currently concentrated in China. Access to specialised machinery for polysilicon, wafer and cell production remains a constraint, while the capital-intensive nature of upstream manufacturing creates additional financing challenges.
The report recommends that Indian companies diversify sources of capital goods and consider joint ventures and strategic partnerships for upstream manufacturing, particularly in polysilicon, ingots and wafers. Such partnerships could help reduce financial risks, facilitate technology transfer and build domestic manufacturing capabilities.
Technology is another constraint as the industry moves towards higher efficiency technologies. Tunnel Oxide Passivated Contact (TOPCon), heterojunction (HJT), perovskite and tandem technologies are gaining importance globally.
Indian manufacturers’ R&D spending remains significantly below Chinese peers. The report says Chinese companies spend an average of about 3 per cent of revenue on R&D, with some spending as much as 6 per cent. MNRE’s R&D disbursement up to December 2024 was about $19 million, compared with $1.4 billion in grants received by Chinese players.
The report also estimates that employee productivity per MW in India is about one third that of global peers, partly because of lower manufacturing scale and limited process integration. The transition from monocrystalline passivated emitter and rear contact (Mono PERC) technology to TOPCon, HJT and tandem cells is expected to increase manufacturing complexity and the requirement for specialised skills.
It recommends creating a dedicated solar R&D fund, increasing MNRE’s R&D allocation, introducing performance-linked R&D incentives and strengthening academia-industry partnerships. It also recommends an industry-led solar skills development council and dedicated training curricula covering polysilicon, wafer, cell and module manufacturing.
India’s PV exports increased eightfold between fiscal 2018 and fiscal 2025, reaching $1.2 billion in fiscal 2025 from $140 million in fiscal 2018. The growth was driven largely by increased cell-to-module manufacturing capacity under the PLI scheme.
However, the US accounted for 97 per cent of India’s PV exports in fiscal 2025. The report attributes the concentration partly to the US restrictions on products linked to China’s Xinjiang region, where more than 39 per cent of the global polysilicon manufacturing base was installed by 2022. This created additional demand for modules from countries including India.
India has had limited penetration in other major importing markets such as Germany, Brazil and the Netherlands, partly because Indian modules were $0.10 to $0.12 per watt more expensive than Chinese modules and India lacked free trade agreements with several major markets.
The report estimates that the global solar market could add 5 terawatts of capacity by 2030. Excluding China, India and some advanced economies, other markets are expected to add about 624 GW over the six years from 2025, equivalent to around 104 GW annually.
It recommends greater use of bilateral and multilateral trade agreements, memoranda of understanding with major importing countries, export credit support, trade missions and overseas manufacturing or assembly bases.
India was the second-largest module manufacturer globally, with 183 GW of capacity enlisted under ALMM as of May 1, 2026. The report says the India-European Union free trade agreement negotiations, concluded on January 27, 2026, could provide opportunities for Indian solar manufacturers once the agreement enters into force.