India is wrapping up a $1 billion subsidy plan to strengthen its solar manufacturing sector, aiming to cut reliance on China and capitalise on the global shift to clean energy, Bloomberg reported, citing people with knowledge of the matter.
The Ministry of New and Renewable Energy is proposing the plan, focusing on supporting domestic producers of wafers and ingots, one of the weakest links in India’s solar sector, according to sources who requested anonymity due to the private nature of the discussions. Moreover, the initiative has the backing of senior advisers in Prime Minister Narendra Modi’s office and is expected to be submitted for cabinet approval in the coming months, the sources said.
India remains highly dependent on China for solar equipment imports, posing a potential risk to the nation’s energy security, the report suggests. It says that, while the country has made significant strides in expanding its domestic production of solar modules and cells, wafer and ingot manufacturing remains a weak link, with only 2 gigawatts of capacity – developed entirely by Adani Enterprises Ltd.
India currently has over 71 gigawatts of module production capacity and nearly 11 gigawatts for solar cells. However, the lack of a robust wafer and ingot supply chain limits the country’s ability to fully localise solar manufacturing, making it vulnerable to global supply chain disruptions and price fluctuations. Strengthening this segment could be a crucial step in reducing dependency on imports and positioning India as a major player in the global renewable energy market, the report says.
The proposed subsidy plan aims to mirror the success of India’s mobile phone manufacturing industry, according to sources familiar with the discussions. Over the years, Prime Minister Modi’s government has invested billions of dollars in incentives to attract major companies like Apple and Samsung to establish production facilities in India.
Despite efforts to expand its wafer and ingot manufacturing, India remains dependent on foreign suppliers for polysilicon, the key raw material used in their production. According to Bloomberg, the country currently has no capacity to produce ultra-refined polysilicon, making it reliant on imports.
Meanwhile, China dominates global polysilicon production with an annual capacity of 2.3 million tonnes, far surpassing Germany, the second-largest producer, which has the capacity to produce just 75,000 tonnes per year. This dependence on imported raw materials continues to be a major challenge for India’s ambition to build a fully self-sufficient solar supply chain.
