The Indian government is taking significant steps to boost domestic production of solar equipment, aiming to reduce dependence on imports from China and mitigate potential supply chain risks. According to Minister of State for New and Renewable Energy and Power, Shripad Yesso Naik, India still relies heavily on China for solar cells, wafers, and polysilicon materials.
India’s current solar PV module manufacturing capacity stands at around 67 GW, while the country’s solar PV cell manufacturing capacity is around 25 GW, and ingot and wafer manufacturing capacity is around 2 GW. Import dependence on a single region like China poses risks, including supply disruptions, price fluctuations, and currency fluctuations.
To address these concerns, the government has introduced several initiatives aimed at increasing local manufacturing. The Production Linked Incentive (PLI) Scheme has a funding of INR 24,000 crore, with the goal of supporting the creation of high-efficiency solar PV module manufacturing in India. The scheme has approved over 48 GW of mostly or fully integrated solar PV production capacity through its first two phases.
The government has also introduced the Domestic Content Requirement (DCR) for government-supported solar projects, ensuring that solar cells and modules used in such projects are sourced from Indian manufacturers. Additionally, the “Make in India” policy requires public sector solar projects to utilize equipment with at least 50 percent domestic content, and import duties on solar parts have been introduced to support local production.
Despite these efforts, India still heavily relies on imported solar cells and wafers. The government acknowledges this challenge and is committed to enhancing local manufacturing capabilities. Ultimately, the goal is to create a strong solar manufacturing sector in India, securing energy needs and promoting renewable energy.