India is looking to deepen its solar manufacturing ecosystem by focusing on upstream components that remain heavily import-dependent.
The Ministry of New and Renewable Energy is now exploring policy support to address this gap as part of a broader push towards self-reliance.
As per news reports, the Ministry of New and Renewable Energy is currently in discussions with the Ministry of Finance to introduce a production-linked incentive scheme for polysilicon manufacturing.
This initiative is aimed at encouraging domestic production of a key raw material used in solar panel manufacturing.
Polysilicon, a highly refined form of silicon, serves as the base input for more than 95% of solar panels globally. It is processed into multi-crystalline structures, which are then converted into wafers, solar cells and ultimately photovoltaic modules.
Explaining the rationale, MNRE Secretary Santosh Kumar Sarangi noted that while India has built strong capacity in downstream segments, “we still depend on imports for upstream components,” adding that discussions are underway to create support mechanisms for polysilicon manufacturing.
India has significantly expanded its solar manufacturing capacity in recent years, supported largely by the ALMM framework. The country currently has around 172 GW of solar module manufacturing capacity and approximately 29 GW of solar cell capacity.
Despite this progress, upstream segments such as polysilicon production remain underdeveloped, creating reliance on imports.
Sarangi pointed out that existing policy tools like ALMM may not be suitable for this segment, stating that “the stakeholders are different” and the nature of polysilicon manufacturing differs from other parts of the solar value chain.
He added that a PLI-type incentive may be more appropriate to attract investment in this area.
Globally, the polysilicon market is highly concentrated, with Chinese companies accounting for over 93% of total production. This concentration has implications not only for solar energy but also for the semiconductor industry, where polysilicon acts as a critical input.
The government’s move reflects an effort to reduce exposure to global supply risks while building domestic capabilities across the entire solar value chain.
As part of its broader strategy, the government recently introduced ALMM List-III, which covers ingots and wafers. Under this provision, solar projects will be required to source these components domestically starting June 2028, supporting the goal of a fully integrated supply chain.
Currently, ALMM List-I for solar modules is already in force, while ALMM List-II for solar PV cells is scheduled to come into effect from June 1.
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With discussions underway for a dedicated PLI scheme and continued policy support through ALMM frameworks, India is working towards building a more integrated and self-reliant solar manufacturing ecosystem, particularly by addressing gaps in upstream production.
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Published on: Apr 9, 2026, 11:06 AM IST
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