The Indian government is planning to introduce incentives to boost domestic manufacturing in the solar industry particularly for ingots, wafers, and polysilicon. This move aims to reduce the country’s dependence on Chinese solar manufacturing equipment and strengthen India’s position in the global solar supply chain.
Key Highlights of the Plan
- Focus on Critical Components: The government is in discussions with stakeholders to incentivize the domestic production of ingots, wafers, and polysilicon, which are essential for solar panel manufacturing.
- 1Billion Capital Subsidy ∗∗: Reports suggest that India is finalizing a∗∗1 Billion Capital Subsidy plan to support domestic producers of wafers and ingots. The proposal is expected to be presented to the cabinet next month.
- Reducing Import Reliance: India currently relies heavily on China for solar manufacturing equipment. The new incentives aim to address this dependency and promote self-reliance in the solar sector.
Current Challenges in India’s Solar Industry
- Limited Capacity: India has made progress in expanding its module and cell manufacturing capacity with over 71 gigawatts (GW) of module capacity and nearly 11 GW of cell capacity. However, the production of wafers and ingots remains a weak link with only 2 GW of capacity currently under development by Adani Enterprises Ltd.
- Chinese Export Curbs: China’s export restrictions on critical solar production equipment introduced in January 2024 have further complicated the establishment of new solar cell manufacturing units in India.
- Rising Import Costs: A report by the Global Trade Research Initiative (GTRI) warned that India’s reliance on solar imports could rise to $30 billion annually by 2030 if domestic production capacity does not increase.
Government’s Vision for Solar Self-Reliance
The Ministry of New and Renewable Energy (MNRE) is actively engaging with stakeholders to finalize the incentive plan. While no formal proposal has been approved yet, the government’s focus is clear: to create a robust domestic solar manufacturing ecosystem that can compete globally.
“The Ministry of New and Renewable Energy is discussing with concerned stakeholders the issue of incentivizing domestic manufacturing of ingots, wafers, and polysilicon. There is no formally approved proposal yet,” said government sources.
India’s Solar Power Capacity
As of January 31, 2025, India’s solar power capacity stands at 100.33 GW, reflecting significant progress in renewable energy adoption. However, to achieve its ambitious target of 500 GW of renewable energy capacity by 2030, India must address the gaps in its solar manufacturing supply chain.
Looking Ahead
The proposed incentives for domestic solar manufacturing mark a crucial step toward achieving India’s renewable energy goals and reducing reliance on Chinese imports. By focusing on critical components like ingots, wafers, and polysilicon, the government aims to create a self-sufficient solar industry that can support the country’s energy transition and economic growth.
As the plan moves closer to approval, it is expected to attract investments, create jobs, and position India as a global leader in solar manufacturing.
