The government is planning to introduce an incentive for domestic manufacturing in the solar industry. According to the Ministry of New and Renewable Energy, the government is in discussions with the stakeholders regarding the incentivisation of domestic manufacturing of ingots, wafers, and polysilicon. This move aims to reduce the country’s dependence on Chinese solar manufacturing equipment.
“The Ministry of New and Renewable Energy is discussing with concerned stakeholders the issue of incentivising domestic manufacturing of ingots, wafers, and polysilicon. There is no formally approved proposal yet,” said government sources.
The statement came after a report indicated that India is finalizing a $1 billion capital subsidy plan to strengthen its solar manufacturing industry. The report also highlighted that the plan will focus on domestic producers of wafers and ingots, which are among the weakest segments of India’s solar industry. The plan is expected to be presented to the cabinet next month and has the backing of senior advisors in the Prime Minister's office.
A report by the Global Trade Research Initiative (GTRI), published in October 2024, stated that India, like the U.S. and European Union (EU), is heavily reliant on China for its solar industry. The report also pointed out that China’s export curbs on critical solar production equipment, introduced in January, have made it even more challenging for new solar cell manufacturing units to thrive in India. The GTRI report further warned that if India’s solar production capacity does not increase, import reliance could rise to $30 billion annually by 2030.
India has made strides in expanding its domestic module and cell manufacturing segments. However, wafers and ingots, which are critical components in solar production, still have only around 2 gigawatts of capacity, which is currently being built by Adani Enterprises Ltd. India now has just over 71 gigawatts of module capacity and nearly 11 gigawatts of cell capacity. As of January 31, 2025, India's solar power capacity was 100.33 GW.