India's solar module capacity surges, but upstream manufacturing lags: NITI Aayog

New Delhi: While India's photovoltaic (PV) module and cell manufacturing capacity has grown significantly in recent years, the industry still faces a shortage of upstream manufacturing capacity, leaving it dependent on imports for key components, NITI Aayog said, highlighting the need to expand capacity from polysilicon to cells.

The report noted that India's photovoltaic manufacturing industry remains largely concentrated in the solar cell and module segments, with total module manufacturing capacity listed under the Approved List of Models and Manufacturers rising sharply to 100 GW in August 2025 from around 2.3 GW in 2014. However, despite this growth, India remains dependent on imports of solar cells and modules, while wafer and polysilicon imports are limited due to a lack of wafer manufacturing and low cell production capacity.

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China accounted for nearly 59 per cent of India's photovoltaic cell and module imports in 2024, reflecting its dominant global manufacturing presence, with over 80 per cent of global supply capacity based in China as of December 2024.

The report further noted, during FY2015 and FY2025, "India added 103 GW of solar capacity, implying a conservative minimum solar-module demand of 103 GW." Also, these installations pushed India's solar energy base to 106 GW67 in March 2025 and the country is expected to add 174 GW to achieve the target of 280 GW in 2030 - which will prompt the need to manufacture components.

Also, "While globally, a few players operate in polysilicon to module stages of the value chain, India has limited presence in ingot-wafer to module stage," the report noted.

Further, China's capacity consolidation and potential US restrictions on Foreign Entities of Concern could tighten global polysilicon supply and push up prices, raising input costs for Indian module makers until backward integration is achieved.

Adding to this, the report further noted that the current oversupply and timely government intervention have supported Indian manufacturers. Meanwhile, it flagged stable market conditions favour integrated value-chain players. "Therefore, it will be critical to expand from the polysilicon to cell manufacturing stage in the future," it said.