India's solar industry is aggressively pursuing a strategy to compete with China's dominance in the global solar market, driven by increasing domestic demand, government support, and a desire to become a major exporter. While challenges remain, India has made significant strides in expanding its manufacturing capacity and reducing its reliance on Chinese imports.

Government Support and Policy Measures

The Indian government has implemented several policy measures to promote domestic solar manufacturing. Key initiatives include:

• Production-Linked Incentive (PLI) Scheme: This scheme provides financial incentives to manufacturers for increasing production of high-efficiency solar PV modules. The government has allocated a total capacity of 39,600 MW of domestic solar PV module manufacturing capacity to 11 companies under the PLI scheme. The PLI scheme has a budget of ₹24,000 crore.
• Domestic Content Requirement (DCR): The DCR mandates the sourcing of solar PV cells and modules from domestic sources in government-funded schemes such as CPSU Scheme Phase-II, PM-KUSUM and PM Surya Ghar: Muft Bijli Yojana.
• Basic Customs Duty (BCD): The government has imposed a basic customs duty on the import of solar PV cells and modules.
• "Make in India" Preference: The government gives preference to 'Make in India' in public procurement in the renewable energy sector, requiring a minimum of 50% local content for bidding eligibility.
• PM Surya Ghar: Muft Bijli Yojana: A scheme to provide free rooftop solar installations to eligible households, with a budget of ₹75,021 crore until 2026-27.

Manufacturing Capacity Expansion

India's solar module manufacturing capacity is set to rise significantly, reaching 160 GW by 2030, up from 80 GW in 2025. Solar cell manufacturing capacity is projected to grow from 15 GW to 120 GW over the same period. Wafer and polysilicon capacities are also expected to expand from 6 GW in 2025 to 100 GW by 2030. By March 2025, India's solar cell manufacturing capacity almost tripled to 25 GW, and module manufacturing capacity nearly doubled to 74 GW.

Decline in Import Dependence

India has been making substantial progress in its transition towards self-reliance in solar energy. In the first eight months of 2024-25, imports of solar cells and modules decreased by 20% and 57%, respectively. The dependence on China has reduced, with imports from China accounting for 56% of solar cells and 65% of solar modules in 2024-25, a significant decline from over 90% in 2023-24.

Challenges and Opportunities

Despite the progress, India still faces several challenges:

• Reliance on Imports: India still relies on imports for solar PV cells and wafers due to limited domestic manufacturing capacity for cells and the absence of wafer production facilities.
• High Upfront Costs: The high upfront costs of solar panels, especially for rooftop solar, can be a barrier for low-income households.
• Land Acquisition and Infrastructure Constraints: Land acquisition for large-scale solar projects and grid integration challenges remain.
• Competition from China: Chinese manufacturers benefit from economies of scale and government support, making it difficult for Indian manufacturers to compete on price.

Despite these challenges, India has the potential to become a major player in the global solar market. The country has a geographical advantage with abundant solar radiation. India's increasing energy demand, driven by rapid industrialization and urbanization, is fueling a solar power manufacturing boom. With continued government support and strategic investments, India can overcome these challenges and emerge as a self-sufficient solar powerhouse.

Impact of Global Policies

Global policies and events also influence India's solar ambitions. The U.S. restrictions on Chinese PV exports have created an opportunity for India to increase its exports to the U.S. However, rising US tariffs on Indian exports and China's ban on exporting certain equipment and machinery to India pose challenges.

Future Outlook

India aims to have 500 GW of renewable energy capacity by 2030, with a significant contribution from solar energy. To achieve this, India plans to add another 200 GW of solar capacity in the next five years. India's cumulative installed solar PV capacity is projected to reach 280 GW to 320 GW by 2030. By addressing the challenges and leveraging its strengths, India can realize its ambition of becoming a global hub for solar manufacturing and contribute to a sustainable energy future.