Key Highlights:
- Govt discussing incentives for local solar manufacturing.
- Aims to reduce dependence on Chinese solar equipment.
- Plan may include $1 billion subsidy for wafer and ingot production.
- India’s solar power capacity reached 100.33 GW as of January 2025.
The Indian government is working on a plan to support domestic solar manufacturing by offering incentives. According to sources from the Ministry of New and Renewable Energy (MNRE), officials are in discussions with industry stakeholders about encouraging local production of ingots, wafers, and polysilicon essential materials for solar panels. This move is aimed at reducing the country’s heavy reliance on Chinese solar equipment.
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Government sources clarified that while discussions are ongoing, no formal approval has been granted yet. However, reports suggest that India is considering a $1 billion capital subsidy to strengthen its solar manufacturing sector. The proposal, which focuses on boosting local wafer and ingot production, is expected to be presented to the cabinet soon. It has also received backing from senior advisors in the Prime Minister’s Office.
A Global Trade Research Initiative (GTRI) report from October 2024 highlighted India’s dependence on China for solar industry supplies, similar to the U.S. and the European Union (EU). The report noted that recent Chinese export restrictions on key solar production equipment, enforced in January, have further complicated efforts to expand India’s solar manufacturing industry. If India fails to increase its production capacity, its annual solar imports could reach $30 billion by 2030, the report warned.
While India has expanded its solar module and cell manufacturing, it still lags in wafer and ingot production. Currently, this segment has only around 2 gigawatts (GW) of capacity, primarily being developed by Adani Enterprises Ltd. In contrast, India’s overall solar module capacity stands at 71 GW, with 11 GW dedicated to solar cell production.
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As of January 31, 2025, India’s total installed solar power capacity had reached 100.33 GW, showing significant growth. However, expanding domestic manufacturing is seen as essential to reduce external dependence and meet future renewable energy targets.
The government’s plan to incentivize local solar manufacturing could be a major step toward reducing reliance on imports and strengthening India’s renewable energy sector. If approved, the proposed subsidy and production boost may help the country develop a more self-sufficient solar industry, ensuring long-term energy security.
