Kamini Gupta, Communication Manager, AXITEC Energy India Pvt. Ltd, leading solar module manufacturer
There is a certain confidence with which India is building its solar future. Announcements of new factories, multi-gigawatt capacities, and billion-rupee investments have become routine. The narrative is compelling: reduce dependence on imports, capture a share of the global supply chain, and emerge as a credible alternative in a China-dominated market.
On paper, the strategy appears to be working. On the ground, however, a more complex story is beginning to unfold—one where policy ambition is running ahead of market reality.
In less than half a decade, India has transformed its solar manufacturing landscape. Module capacity, which stood at under 35–40 GW in 2020, is now expected to cross 120–125 GW by 2025. Projections suggest this could rise further to 160–170 GW by 2027, driven by ongoing capacity expansions and PLI-backed projects.
India is currently installing roughly 35–45 GW of solar capacity annually, with FY2024 installations at around 30–32 GW and expected acceleration ahead. Even with aggressive growth assumptions of 50 GW per year by 2027, domestic demand is unlikely to absorb the full extent of manufacturing capacity being created.
This implies a potential oversupply gap of 80–100 GW, a mismatch that is no longer theoretical. It is already visible in pricing pressures, utilisation levels (often reported in the 50–70% range), and increasingly, in industry conversations.
The rapid build-out of capacity has not happened organically. It has been carefully and deliberately engineered through policy. Instruments such as:
have created a protected and incentivised environment for domestic players.
The results have been immediate:
In many ways, this is precisely what policy is meant to do—accelerate capability where the market alone may move slowly.
The assumption underlying India’s manufacturing strategy is that demand—both domestic and global—will keep pace with supply. That assumption is now being tested.
Domestically, solar installations are growing, but execution challenges remain:
Export markets, particularly the United States and Europe, are increasingly shaped by trade barriers and local content rules. For instance:
In effect, the two engines expected to drive demand—domestic expansion and export growth—are both less predictable than anticipated.
India’s manufacturing strength today is concentrated largely in modules, which account for over 80–85% of current manufacturing capacity.
However:
This creates a structural dependency on imports, particularly from China, which controls over 75–80% of global polysilicon, wafer, and cell production.
While India is adding module capacity at scale, it does not yet control the deeper layers of manufacturing that determine global cost competitiveness.
Oversupply is often discussed in abstract terms, but for manufacturers, it translates into very real pressures.
As capacity expands faster than demand:
Historically, sectors that have gone through similar phases—such as steel, telecom, and aviation—have experienced cycles of rapid expansion followed by consolidation.
Much of India’s optimism rests on the “China+1” narrative—the idea that global markets are actively seeking alternatives to Chinese supply chains.
There is merit to this:
But opportunity does not automatically translate into competitiveness.
China’s dominance is built on:
For India to truly benefit, it must compete not just in capacity—but in cost, quality, and reliability.
Rebalancing Policy and Market Forces
None of this suggests that India’s strategy is misplaced. In fact, the policy push has achieved something significant—it has created a manufacturing base where little existed before.
As the sector matures, the focus will need to shift:
This is where the balance between policy push and market pull becomes critical.
India’s solar manufacturing journey is at an inflection point. The foundations have been laid. The factories are operational. The ambition is clear.
What remains uncertain is whether demand—both at home and abroad—will evolve quickly enough to justify the scale being built.
If it does, India could capture a meaningful share of the $300+ billion global solar manufacturing market by 2030. If it does not, the sector may face a phase of consolidation and price correction.
Either way, the next phase will be shaped less by policy announcements and more by market realities.
And in that shift—from policy-led expansion to demand-driven sustainability—lies the true test of India’s solar manufacturing strategy.
The Author of this article is – 
Kamini Gupta, Communication Manager, AXITEC Energy India Pvt. Ltd, leading solar module manufacturer
Save my name, email, and website in this browser for the next time I comment.

source