India has taken significant strides when it comes to reducing import dependency for solar modules and PV cells. This is a result of expanding domestic manufacturing capabilities. Although China still remains the largest supplier, imports from India’s northern neighbour have decreased significantly. From over 90% in FY2022 to 56% for photovoltaic (PV) cells and 65% for modules in FY2024, according to a report by Rubix, an analytics services provider.

The trend seen in recent years has continued in FY2025 as well. As per Rubix estimates, during the first eight months of FY2025 (April–November 2024), imports of solar cells and modules declined by 20% and 57% respectively in this period compared to the first eight months of FY2024.

The major drivers for this have been government support through budgetary allocation and initiatives such as the production linked incentive (PLI) scheme, PM Surya Ghar: Muft Bijli Yojana and solar parks. Domestic manufacturing has also strengthened due to the introduction of ALMM List II, doubling of project financing loans for solar projects and the US tariff war on China and Southeast Asian countries. Rubix said that the sector has also benefited as it is the largest recipient of foreign direct investment (FDI) among all renewable segments.

Increasing self-reliance, but still a long way to go

As the Rubix reports says, India has managed to reduce reliance on Chinese imports. However, there is still a long way to go before India becomes truly self-reliant.

India’s imports of solar modules were significantly higher than the imports of solar cells, nearly 2.3 times higher than that of solar cells (in terms of value) in FY2024. In value terms, solar module imports stood at $4.35bn in FY2024, recording 360% growth compared to FY2023. On the other hand, imports of solar cells stood at $1.85bn, recording 41% growth compared to FY2023.

China dominates the global solar supply chain, controlling 80% of solar cell production and 70%–80% of solar module production. Of the top six global solar equipment manufacturers, five, namely Tongwei Solar (TWSolar), LONGi Green Energy, JA Solar, Trina Solar and Jinko Solar, are from China. Therefore, unsurprisingly, China remains India’s largest solar cell supplier, accounting for nearly 56% share in FY2024, followed by Malaysia (17%) and Thailand (13%). Similarly, China continues its dominance as a module supplier with a share of 65%, followed by Vietnam (21%) and Malaysia (5%).

Indian PV manufacturers eye export market

With the growth in local manufacturing, Indian PV manufacturers are increasingly targeting the export market.

Until FY2024, three of the largest domestic players—Waaree Energies, Adani Solar and Vikram Solar—were also India’s largest PV exporters. These firms exported over 50% of their output in FY2024. Other Indian PV manufacturers, such as Grew Energy, ReNew Power, Navitas, Solex Energy and Saatvik Energy, are also growing in the international markets and setting up supply chains overseas, according to Rubix.

Additionally, Waaree Energies and Vikram Solar are planning to set up PV manufacturing facilities in the US. The recent US tariff hikes on Chinese solar polysilicon, wafers and cells present both opportunities and risks for India’s solar industry, Rubix said.

Also, the US this week announced plans to impose tariffs of up to 3521% on imports of solar panels from four South East Asian countries: Cambodia, Thailand, Malaysia and Vietnam. Following the announcement, shares of Indian solar equipment manufacturers like Premier Energies and Waaree Energies have rallied sharply. Analysts believe Indian companies are set to benefit as currently India’s solar equipment exports to the US are subject to a 36% tariff, which makes it the lowest among the top solar exporters to the US. 

Challenges that need to be addressed

India remains dependent on China for over 50% of its PV cell and module components, particularly polysilicon and wafers. If China redirects its excess supply to India at lower prices to compensate for US losses, domestic manufacturers may struggle with margin pressures and price competition, Rubix said.

Major government policies at a glance

As stated, government policies have played a major role in boosting local manufacturing of solar components. Some of the policy initiatives are:

PM - Surya Ghar: Muft Bijli Yojana: This aims to install rooftop solar plants in 10mn households and has an outlay of INR750bn to be implemented until FY2027. This is expected to enable around 30 GW of residential rooftop solar capacity and 40–45 GW of overall rooftop solar capacity addition by FY2027. The announcements in the 2025-26 budget increased the allocation by 80% to INR200bn for FY2026 compared to INR111bn in the FY2025.

Pradhan Mantri Kisan Urja Suraksha evam Utthaan Mahabhiyan (PM-KUSUM): This scheme seeks to boost solar power installation in rural areas by installing solar-powered irrigation systems, including solar pumps and grid-connected solar power plants.

PLI scheme for national orogramme on high efficiency solar photovoltaic (PV) modules: The goal of this is to attain a gigawatt-level manufacturing capacity in solar PV modules through an investment of INR240bn. This scheme has been extended till 2030.

Solar parks scheme: This scheme has a sanctioned capacity of 40 GW for the development of 58 solar parks in 13 states, of which 56 solar parks have already been commissioned.

CPSU scheme phase-II (government producer scheme): The objective of this scheme is to help public sector units and government organisations set up grid-connected solar PV power projects using domestically manufactured solar PV cells and modules, with viability gap funding support for self-use or use by the government or government entities.

New solar power scheme (for particularly vulnerable tribal groups (PVTG) habitations / villages): This was launched in January 2024 for the electrification of 100,000 un-electrified PVTG households in 18 states and 1 union territory with a budget of INR9.15bn.

Rooftop solar PV simplification: In February 2024, rules were amended to ease and accelerate the installation of rooftop solar systems as approvals for systems up to 10 kW no longer require feasibility studies.