India Reduces Solar Module Imports in FY26 as Domestic Capacity Expands, China Retains Upstream Dominance

India's solar manufacturing sector recorded further expansion in FY26, supported by policy measures for increasing domestic production. Module manufacturing capacity has grown from 8.2 GW in 2021 to around 210 GW, as per The Financial Express report.  

Capacity under the Approved List of Models and Manufacturers (ALMM) also increased from 67.3 GW in February 2025 to 193.9 GW by May 2026. 

The expansion has reduced imports of finished solar modules. Commerce Ministry data showed module imports declined 51.6% year-on-year to ₹8,835.24 crore in FY26 from ₹18,263.35 crore in the previous year. In dollar terms, imports fell to $994.66 million from $2.15 billion. 

Solar Installation Growth Remains Strong 

India added 44.6 GW of solar capacity during FY26, taking cumulative installed solar capacity beyond 150 GW. The country is now the second-largest solar market globally by annual installations after China.  

The increase reflects continued investment in renewable energy projects as India works towards reducing dependence on fossil fuels and expanding non-fossil power generation. 

However, manufacturing growth has been concentrated largely in module assembly rather than across the entire production chain. 

Higher Cell Imports Highlight Supply Gap 

Despite lower module imports, purchases of solar cells from overseas continued to rise. Imports of solar cells increased 95% to ₹27,133.68 crore in FY26 from ₹13,905.37 crore in FY25. The number of imported cells also rose to 8.01 billion units from 5.06 billion a year earlier. 

Domestic cell manufacturing capacity is estimated at 27-30 GW, although effective operational capacity is closer to 20 GW as recently commissioned plants continue to stabilise.  

Manufacturers have announced investments of more than ₹35,000 crore to increase capacity over the next two years. 

China Continues to Supply Key Inputs 

India remains dependent on imports for wafers, polysilicon, inverters and manufacturing equipment. More than 99% of the country's imports of undiffused silicon wafers during FY26 originated from China.  

China also accounted for 93.2% of global polysilicon production, 97% of wafers, 90% of cells and 86.5% of solar modules in 2024. 

Although imports from Indonesia, Ethiopia, Thailand and Vietnam have increased, these countries also rely on Chinese materials and equipment for production. 

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Conclusion 

Growth in domestic module production has lowered imports of finished panels in FY26. At the same time, dependence on imported cells and upstream materials remains a key feature of India's solar manufacturing sector. 

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