India building solar manufacturing at record speed; now it must make it competitive, says new CSE study

• India’s dependence on imports has moved upstream to cells and wafers, finds the study – cell imports have risen to about US $3 billion in 2025-26, while module imports have fallen.
• Capacity (August 2026) stands at over 219 GW for modules, around 31 GW for cells, and a mere 2 GW for wafers.
• Our costs remain higher than those of our competitors -- Indian modules cost 25-35 per cent more than Chinese ones.

• Says CSE director general Sunita Narain: “The challenge now is to deepen domestic capabilities and build an industry that is globally competitive and can stand on its own feet.” 

Download the study report click here 

New Delhi, November 12, 2026: India has built a solar manufacturing base faster than any country outside China. What it now needs to do – and this is the tough task – is to turn this capacity into competitive production across the value chain – says a new study report released here today by Centre for Science and Environment (CSE). 

Speaking at a stakeholder’s roundtable where the report -- India's Solar Manufacturing Ecosystem: A Landscape Study – was released, CSE director general Sunita Narain said: "India has to own the clean energy transition, and ownership means making the technology at home. Our industry has built solar module manufacturing capacity at remarkable speed. The challenge now is to deepen domestic capabilities. Our dependence on imports has moved upstream to cells and wafers, while our costs remain higher than those of our competitors. The next phase should focus on building an industry that is globally competitive and can stand on its own feet.” 

What the CSE study finds

• Import dependence has shifted upstream: While module imports have fallen from US $4.35 billion in 2023-24 to under US $1 billion in 2025-26, imports of cells have gone up from US $1.85 billion to about US $3 billion in the same period.
• A cost gap remains: Indian modules cost 25-35 per cent more than Chinese modules. Indian plants operate at a fraction of the scale of those in China and depend on imported components; they also end up paying more for power and capital.
• Capacity has run ahead of incentives: The Rs 24,000-crore Production Linked Incentive (PLI) scheme had disbursed no funds as of August 2026. Firms backed by the scheme account for about 30 GW of module capacity.
• Localisation has a price: ALMM (Approved List of Models and Manufacturers) List-II, in force from June 1, 2026, extends domestic content requirements from modules to cells. With List-I, it adds an estimated Rs 32,500-37,900 crore to solar procurement costs in FY2026-27. The paper says this cost may be worth bearing, but should come with a defined horizon and should yield lasting gains in capability and resilience.
• Trade pressure is building on both fronts: In May 2026, China sought a WTO panel to challenge India's tariff regime and elements of its PLI scheme. The US has imposed preliminary countervailing duties of around 126 per cent and anti-dumping duties of 123 per cent on Indian cells and modules. 

Avantika Goswami, programme manager, Climate Change and Green Economy Programme, CSE, says: “India’s policy package of trade measures, ALMM and PLI is helping build a domestic market with significant long-term potential. The challenge now is to translate this market opportunity into a competitive manufacturing ecosystem.” 

Goswami adds: “Access to international markets, particularly the US, has become more constrained, while India’s trade measures are facing scrutiny at the WTO. Building competitiveness will require a deeper domestic supplier base, access to technology and more affordable finance. Policy support is giving the industry time and space to develop. The next phase must use this opportunity to build the capabilities needed to compete at home and globally.” 

The paper closes with three questions for the next phase of policy.

• Protection with a measure: Duties and ALMM mandates provide domestic manufacturers the space to upscale. They also raise the cost of imported cells for module makers who are downstream. The paper asks whether protection should be linked to measurable improvements in domestic scale and cost competitiveness.
• Go upstream selectively: A competitive polysilicon plant needs US $1-1.2 billion in capital. Indian production is projected at US $17-18 per kg, against Chinese spot prices of US $4-6. Yet wafers are the narrowest chokepoint of the chain, with China holding 97 per cent of capacity. The paper asks whether resilience requires polysilicon at home, or whether domestic capacity at selected stages such as wafers, combined with diversified sourcing, could serve the purpose.
• Direct support to the suppliers: The PLI scheme named component capacity as an objective, yet silver paste, solar glass and aluminium frames continue to be imported partially or substantially. The paper asks whether public support should move from manufacturers who would have invested anyway to the makers of equipment, materials and components, where private money has not come on its own. 

For interviews and more details, please contact Sukanya Nair of The CSE Media Resource Centre: sukanya.nair@cseindia.org, 8816818864.