Behind India's import dependence is solar installations

India has a solar module manufacturing capacity of over 200 GW a year but only the capacity  to make 27 GW  of cells, the primary component to convert sunshine into electricity. This means solar module manufacturing in India is built on imports.  

This poses a big risk because any global value chain disruption due to events such as Covid-19 could dent India’s renewable energy growth led by solar and battery storage due to its heavy import dependence on China.

India imported photovoltaic cells valued at $3,058.85 million in FY26, a jump of 86% over FY25, while PV module imports declined 53.77% to $994.66 million during the same period, according to the commerce ministry data. The rise in PV cell demand was driven by a record 51 GW of solar deployment in FY26.

Cells are the building blocks of solar modules. The module manufacturing requires polysilicon, which is melted to form solid blocks of silicon known as ingots. These are sliced into wafers, serving as the foundational material for solar cells.

This is where the Chinese dependence for the core lies. India has multiplied its solar installations tenfold in the past decade, yet it imports nearly all upstream essentials—98% of wafers and 100% of polysilicon. India has 2GW of ingot and wafer capacity and nothing of polysilicon.

Equipment bottlenecks are adding to the dependence. Over 90% of vital upstream tools, like Siemens reactors, ingot furnaces, diamond-wire saws, and other systems are imported, with Chinese firms controlling module assembly lines, according to a recent paper on India’s PV Manufacturing and Its Strategic Inflection Points by TERI.

Indian entities, such as HHV and Cliantech, on the other hand, offer only basic alternatives. This reliance amplifies foreign exchange risks, supply disruptions, and geopolitical tensions, especially in capital-heavy stages. Without targeted incentives and research & development, toolchains will remain the sector’s silent saboteur, it says.

Vinay Thadani, Director & CEO, GREW Solar, says India’s renewable energy sector still has a significant level of import dependence, particularly in solar cells, and the critical upstream segment, especially wafers, ingots, and polysilicon, remain the next major focus area for the industry.

“Reducing import dependence will be critical for ensuring long-term energy security, supply chain stability, and cost competitiveness as India moves towards its ambitious clean energy targets. India’s renewable energy ambitions are scaling rapidly, and manufacturing capabilities must grow alongside deployment,” says Thadani.

Import Reliance

The reliance is primarily on China, which supplies 95% of the world’s wafers and polysilicon. Without rapid upstream investment, the supply–demand gap for these inputs will widen as installation volumes grow. 

Closing this gap will require large capital expenditures for vertical integration. Manufacturing polysilicon and wafers is capital-intensive, with long lead times and high technological barriers. To achieve an additional 30–40 GW of upstream capacity (cells, wafers, polysilicon) by 2030, tens of billions of dollars will need to be invested.

“Industry estimates suggest setting up a modern integrated polysilicon–wafer–cell production facilities can cost $150–350 million per GW of annual capacity depending on the technology used. Fully integrated polysilicon-to-module facilities may range from $200–400 million per GW, reflecting additional module production costs and India-specific infrastructure challenges,” says Aniket Tiwari, Research Associate, TERI.

India’s solar growth is now directly linked to battery storage with bidding mandates making battery storage element mandatory for all projects to address intermittency challenge of renewable power.

Akshay Hiranandani, CEO of Serentica Renewables, says India’s battery storage ecosystem is still heavily dependent on imports, particularly of lithium-ion cells, critical minerals, and advanced battery technologies.

“Building a competitive storage ecosystem will require more than manufacturing capacity alone. The sector needs long-term policy visibility, stronger domestic supply chains, access to critical minerals, and accelerated deployment of grid-scale storage infrastructure,” says Hiranandani.

The larger challenge is that India’s energy transition is now moving from renewable capacity addition to renewable reliability.

New Mandate

Starting June 1, only locally manufactured solar cells will be used in domestic rooftop and commercial and industrial solar projects. The Ministry of New and Renewable Energy (MNRE) directive says that all “net-metering” and “open access” solar projects commissioned after June 1 will have to use domestically made solar cells.

These are rooftop solar installations under the PM Surya Ghar: Muft Bijli Yojana, where consumers can offset electricity bills by supplying surplus power back to the grid while under open access, commercial and industrial consumers procure renewable power from project developers.

Initiatives such as the Production Linked Incentive (PLI) scheme, Approved List of Models and Manufacturers (ALMM), Domestic Content Requirement, and Basic Customs Duty have significantly accelerated investments.

Thadani says the policy focus is now moving upstream.

The larger objective is not just reducing imports but building a globally competitive renewable energy manufacturing ecosystem.

Industry Progress

The industry is now moving beyond module manufacturing and focusing on deeper backward integration to strengthen supply chain resilience and reduce long-term dependence on imports.

Reliance, Adani, Tata Power, Waree, Avaada, Grew and Renew, among others, have entered into backward integration with focus on upstream solar value chain. Tata Power Renewable Energy Ltd plans to invest Rs 6,500 crore to develop an ingot-wafer manufacturing capacity of up to 10 GW in two phases of 5 GW each.

The TERI paper emphasises that India should extend ALMM, which currently certifies module makers to the entire value chain. MNRE has already announced an ALMM for cells from June 2026. Now it is time to extend it to wafers and polysilicon in a year or two.

“In parallel, to manage the tariff impact, the cell and upstream ALMM transition should be ring-fenced to government and PSU-linked procurement, or to a defined annual allocation (for example, 25–50 GW), while open-access and competitively tendered private projects retain flexibility to procure least-cost modules during the scale-up period,” it says.

@richajourno