Foreign firms investing in solar manufacturing in India benefit from PLI incentives, protective customs duties, and strong export demand as the country targets 500 GW renewable capacity by 2030.
India’s solar manufacturing sector is scaling at great speed. Solar module capacity has doubled from 38 GW in March 2024 to 74 GW in March 2025. Solar Photovoltaic (PV) cell manufacturing capacity tripled during the same period to reach 25 GW. According to a report by SolarPower Europe, India’s solar cell manufacturing capacity is projected to grow to 120 GW and 160 GW of module manufacturing capacity by 2030.
The foundation of India’s solar expansion lies in the central government’s target of achieving 500 GW of non-fossil fuel capacity by 2030. The Union Budget 2025 has earmarked INR 242.24 billion (US$2.7 billion) for the solar sector to achieve this end.
India’s position as a solar manufacturing hub is also tied to the Make in India program, which puts emphasis on domestic production of critical inputs and goods. The central government has also announced a roadmap to build 40 GW of wafer capacity by 2027 and to develop polysilicon production capabilities, areas where India currently has no prominent presence.
The PLI Scheme for High Efficiency Solar PV Modules offers production-based incentives for five years after commissioning and has an allocation of INR 240 billion (US$2.7 billion).
By June 2025, the scheme enabled 18.5 GW of solar module capacity, 9.7 GW of cell capacity, and 2.2 GW of ingot-wafer capacity. Its focus is to improve quality control in solar manufacturing and reduce reliance on imports to avert supply chain risks.
Name of company
Location of manufacturing unit(s)
PLI tranche
1
Shirdi Sai Electrical Limited / Indosol Solar Private Limited
Andhra Pradesh
Tranche-I
2
Reliance Industries Limited
Gujarat
Tranche-I
3
Adani New Industries Limited
Gujarat
Tranche-I
4
Indosol Solar Private Limited
Andhra Pradesh
Tranche-II
5
Reliance Industries Limited
Gujarat
Tranche-II
6
FS India Solar Ventures Private Limited
Tamil Nadu
Tranche-II
7
Waaree Energies Limited / Sangam Solar One Private Limited
Gujarat, Maharashtra
Tranche-II
8
Avaada Electro Private Limited
Uttar Pradesh, Maharashtra
Tranche-II
9
ReNew Photovoltaics Private Limited
Rajasthan, Gujarat
Tranche-II
10
JSW Renewable Technologies Limited
Rajasthan
Tranche-II
11
Grew Energy Private Limited
Rajasthan, Madhya Pradesh, Jammu & Kashmir
Tranche-II
12
VSL Green Power Private Limited
Tamil Nadu
Tranche-II
13
AMPIN Solar One Private Limited
Odisha
Tranche-II
14
TP Solar Limited
Tamil Nadu
Tranche-II
Source: PV Magazine
From September 22, 2025, the goods and services tax (GST) rate on solar equipment will be cut from 12 percent to 5 percent. The reduction applies to modules, cells, and related renewable devices, which will see lower capital costs of projects by about five percent. For developers, this translates into an estimated 10 paise (US$0.00011) per unit reduction in solar power generation costs.
Read more: India’s GST Overhaul: What Goods Become Cheaper and What Gets Costlier
India requires government-backed projects to use only firms listed in the Approved List of Models and Manufacturers (ALMM). From just 2.3 GW of listed module capacity in 2014, the ALMM list had expanded to 100 GW by August 2025, covering more than 100 manufacturers across 123 facilities. In June 2026, a second list of ALMM will take effect for solar cells.
Although the ALMM framework helps domestic suppliers, its intermittent suspension and reinstatement have caused concern for both developers and manufacturers.
India has tightened its Domestic Content Requirement (DCR) rules. As of March 2025, crystalline-silicon cells count as locally made only if they are produced in India using undiffused silicon wafers. Cells from imported diffused wafers do not qualify for DCR. And from June 2026, all projects must source both modules and cells domestically. The objective is to curb imports, especially from China, and to support upstream investment in wafers and ingots.
India allows 100 percent FDI in renewable energy generation and distribution through the automatic route, without prior government approval. Solar manufacturing is part of this liberal FDI policy and thus makes India one of the most open global markets for foreign capital in renewables.
Import tariffs remain an important tool to encourage domestic production for central government. Under the 2025 budget:
A mix of domestic conglomerates and foreign partnerships are becoming part of India’s solar supply chain:
Foreign firms are also investing directly or via joint ventures in India’s solar manufacturing industry. Hyderabad based company Premier Energies has partnered with Taiwan’s Sino-American Silicon Products in a 74:26 joint venture to establish a 2 GW wafer facility.
Despite strong demand, India remains heavily dependent on imports for upstream components. Globally, China controls between 75 percent and 95 percent of the solar PV supply chain, including 91 percent of polysilicon and more than 97 percent of wafers. India still imports nearly 80 percent of its solar equipment, with over 60 percent coming from China.
In FY 2024-25, imports for the solar sector reached US$7 billion, with US$3.89 billion sourced from China. Yet, there are signs of diversification in the making. China’s share of solar cell imports dropped from more than 90 percent in FY 2022-23 to 56 percent in FY 2024-25. India is pushing to build its domestic capacity with state-led incentives, although self-reliance remains distant in upstream portion of solar supply chain.
For foreign companies, understanding the local compliance requirements is important for market entry:
The Section 63 guidelines under the Electricity Act, 2003 allow government agencies or DISCOMs to procure renewable power (solar, wind, hybrid, or renewable + storage) through tariff-based competitive bidding (TBCB).
Importantly, these guidelines also say that developers with already commissioned projects or those under construction with “untied capacity” (capacity not yet contracted under a power purchase agreement) can participate in such bids — not just new projects.
The confusion arises around whether these already-built plants must comply with the new ALMM List-II (solar cells) requirement when they participate in such bids. The government has clarified as follows.
If the bid submission date is after August 31, 2025:
Then it is exempt from the solar cell ALMM requirement, even if the bid is submitted after that date.
Source: MNRE, September 23, 2025
Foreign investors can enter India’s solar sector through multiple channels. As we have seen, the FDI policy permits up to 100 percent foreign equity via the automatic route, covering both manufacturing and project development. This means no prior government approval is required for most ventures.
Common entry structures are:
In 2022, Amp Energy made a joint venture with Websol for 1.2 GW cell and module production, and in 2025, Micromax Informatics is collaborating with China’s Jinchen for a 5 GW module line.
India’s solar exports have grown dramatically, rising 23-fold from FY 2022-23 to FY 2024-25 to reach about US$2 billion. The US accounts for more than 97 percent of India’s solar exports, followed by Europe (Germany, Netherlands, Spain), the UAE, Vietnam, and Brazil.
India currently holds a 3.8 percent share of global solar module exports. Given rising demand in Africa and the Middle East, firms based in India have the potential to expand their footprint beyond traditional markets. Export prospects are especially attractive for companies that can manufacture in India and integrate their unit into the global supply chain to benefit from lower costs and preferential trade routes.
Despite the growth story, companies choosing to tread the Indian market and set up manufacturing face several challenges:
India’s solar manufacturing industry is an attractive bet for foreign players. India offers a domestic market with increasing appetite for sustainable and renewable, favorable government incentives, and easy export routes to under tapped markets. If India could successfully integrate itself into up and downstream global supply chain and shield itself from tariff uncertainties, investors can expect a bag of immediate opportunities and long-term positioning in a sector central to both India’s energy transition and global decarbonization.
Foreign firms can use professional help to explore the potential of Indian market, navigate certification requirements, or enter in a joint venture with local company. For business inquiries, reach our experts at: India@dezshira.com
(US$1 = INR 88.45)
About Us
India Briefing is one of five regional publications under the Asia Briefing brand. It is supported by Dezan Shira & Associates, a pan-Asia, multi-disciplinary professional services firm that assists foreign investors throughout Asia, including through offices in Delhi, Mumbai, and Bengaluru in India. Dezan Shira & Associates also maintains offices or has alliance partners assisting foreign investors in China, Hong Kong SAR, Vietnam, Indonesia, Singapore, Malaysia, Mongolia, Dubai (UAE), Japan, South Korea, Nepal, The Philippines, Sri Lanka, Thailand, Italy, Germany, Bangladesh, Australia, United States, and United Kingdom and Ireland.
For a complimentary subscription to India Briefing’s content products, please click here. For support with establishing a business in India or for assistance in analyzing and entering markets, please contact the firm at india@dezshira.com or visit our website at www.dezshira.com.
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