India’s Solar Ambitions at Risk: Industry Leaders Call for Urgent Policy Shift Amid Global Supply Chain Volatility

Greater Noida — A critical structural imbalance in India’s renewable energy manufacturing ecosystem has prompted industry leaders to sound the alarm. As China moves to impose export restrictions on 12 key solar technologies, India’s heavy reliance on imported components has exposed deep vulnerabilities in its solar expansion strategy, threatening project timelines and potentially driving up electricity tariffs across the country.

Speaking at the Renewable Energy India Expo 2026, Chetan Shah, Chairman and Managing Director of Solex Energy, highlighted the precarious position of domestic manufacturers. With China currently exerting control over 75% to 90% of the global solar supply chain, the threat of restricted technology access creates an urgent need for India to pivot toward genuine, integrated domestic production.

The Widening Capacity Chasm

The core of the crisis lies in a significant mismatch between solar module assembly and upstream manufacturing. Recent data as of June 2026 reveals that India’s solar module manufacturing capacity has ballooned to approximately 262 GW. In stark contrast, domestic solar cell production capacity stands at a mere 37 GW. Even more alarming is the state of the raw material pipeline: ingot and wafer production is languishing at roughly 2 GW, and the country possesses zero domestic polysilicon manufacturing capacity.

This “module-heavy” model leaves Indian project developers at the mercy of international markets. As domestic firms continue to focus primarily on assembling modules using imported cells, any global supply chain disruption—such as the one looming from China’s proposed technology export bans—could trigger immediate shortages. These disruptions are expected to translate into higher capital expenditure for projects, ultimately putting upward pressure on the power purchase agreements that dictate electricity costs for end-consumers.

Strategic Policy Adjustments Required

To navigate this bottleneck, the industry is calling for a recalibration of government policy. Shah has formally recommended a 12-month extension for the implementation of the Approved List of Models and Manufacturers (ALMM-II). This window, according to industry experts, is essential to grant domestic firms the necessary breathing room to scale their cell manufacturing facilities without facing immediate regulatory penalties.

Beyond timeline extensions, the consensus among manufacturers is that fiscal support must evolve. The call to action includes:

• Targeted Incentives: Shifting from broad support to dedicated Production-Linked Incentives (PLI) specifically aimed at the upstream segments of the solar value chain.
• Capital Subsidies: Direct financial support to help manufacturers overcome the high entry barriers of ingot, wafer, and polysilicon production.
• Synergistic Alliances: Strengthening collaborations with domestic capital goods manufacturers and academic research institutions to localize technical expertise.

Balancing Self-Reliance with Global Connectivity

While China’s proposed restrictions may dampen near-term commissioning schedules, market analysts at JM Financial suggest that the crisis could ultimately serve as a catalyst for long-term localization. If India successfully bridges the upstream gap, it stands to reap significant economic rewards, including large-scale job creation and a reduction in its trade deficit.

However, the transition comes with a caveat. India must avoid becoming an isolated, high-cost market. To maintain the competitiveness of locally manufactured equipment, industry leaders are urging the government to forge stronger technological partnerships with global leaders in the US, European Union, South Korea, Japan, and Taiwan. By diversifying technology sources, India can move away from its single-origin dependency.

As India chases its ambitious clean energy targets, the race to build a resilient, end-to-end solar supply chain has never been more urgent. Whether the government’s policy framework can pivot quickly enough to balance manufacturing self-reliance with the need for affordable, utility-scale power will be the defining challenge for the nation’s energy transition over the coming decade.

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