India’s renewable energy transition is often celebrated as one of the country’s greatest development achievements. Installed capacity of solar power has crossed 162 GW by June 2026, making India one of the world’s fastest-growing renewable energy hub. Yet, there is an uncomfortable truth which lies behind this success. While India is steadily reducing its dependence on imported fossil fuels, it is becoming more and more reliant on imported technologies that power the clean energy transition. Around 80% of the equipment used in a typical solar installation is still imported, with a significant share of these supply chains directly or indirectly linked to China. The next phase of India’s energy transition is therefore no longer just about installing more renewable energy, it is about building the technologies that make that transition possible.
This problem extends beyond solar panels. As renewable energy becomes a larger share of India’s electricity mix, Battery Energy Storage Systems (BESS) are emerging as a critical component of the power system. Solar generation peaks during the day, while electricity demand typically peaks after sunset. Batteries bridge this mismatch by storing excess daytime generation and supplying electricity when it is needed most. If India continues to rely on imported battery cells in the same way it depends on imported solar components, it simply risks replacing one strategic dependence with another, instead of minimizing this dependence at all.
The similarity between India’s solar and battery industries is striking. In both sectors, India has made impressive progress in deployment and downstream manufacturing while remaining dependent on imported upstream technologies. The challenge is therefore not simply one of trade, but of engineering capability and industrial depth.
The solar manufacturing value chain illustrates this clearly. More than 95% of the modules deployed across various types of installations in India are based on crystalline silicon technology, whose manufacturing involves four key stages, namely, polysilicon production, ingot and wafer manufacturing, solar cell fabrication, and module assembly. While India has expanded rapidly in module manufacturing, the technologically intensive upstream stages remain largely outside its industrial base. China, today accounts for more than 97% of global wafer manufacturing capacity followed by 83% of module manufacturing capacity, giving it unparalleled influence over the global solar supply chain. Consequently, the country from which India imports a module does not necessarily reflect where its most critical components originate.
India’s recent trade patterns emphasize this point. Imports of finished modules have declined, suggesting that domestic manufacturing is getting stronger. However, dependence has mainly shifted upstream. Rather than importing completed modules, manufacturers are increasingly importing solar cells and assembling modules domestically. In other words, India has changed the form of its dependence without eliminating it. Imports from countries such as Vietnam and Malaysia are often viewed as diversification, however, it is interesting to note that much of their manufacturing still relies on Chinese wafers, cells and investment. Thus, import diversification, does not necessarily translate into supply chain diversification.
Recognising these difficulties, the Government of India has introduced measures such as the Basic Customs Duty (BCD), the Approved List of Models and Manufacturers (ALMM), anti-dumping duties and stronger domestic content requirements. The extension of ALMM to solar cells is particularly significant because it begins to address one of the weakest links in India’s manufacturing ecosystem. However, tariffs alone cannot build a globally competitive industry. While they provide temporary protection, long-term competitiveness will depend on investments in upstream manufacturing particularly wafers, cells and polysilicon as well as next-generation technologies such as perovskite-silicon tandem solar cells.
The battery sector is beginning to follow a similar trajectory. As renewable energy expands, battery storage is becoming important for maintaining grid reliability. Yet the global battery supply chain is even more concentrated than solar manufacturing, with China dominating the refining of critical minerals and lithium-ion cell production. India’s lithium-ion cell imports have grown nearly eight-times over the past six years, underscoring the pace at which a new kind of dependence is coming up. As battery prices continue to fall, solar-plus-storage projects will become increasingly attractive, but unless domestic manufacturing keeps a momentum, every new battery installed could deepen India’s reliance on imported technologies.
Government initiatives such as the Advanced Chemistry Cell Production Linked Incentive (ACC-PLI) scheme, the National Framework for Energy Storage Systems, Viability Gap Funding (VGF) and the Energy Storage Obligation (ESO) have laid the foundation for a domestic battery ecosystem. However, deployment is progressing faster than manufacturing. Much of the announced investment has concentrated on the battery pack assembly, while domestic production of cells and upstream battery materials remains limited. This replicates the scenario with the solar sector, where downstream manufacturing grew well before upstream capabilities matured.
The connotations for India’s clean energy transition are fairly clear. Long-term energy security cannot be delivered through expanding renewable energy alone. It must be accompanied by resilient domestic manufacturing. Hence, the next phase of industrial policy has to move beyond downstream assembly and prioritise upstream capabilities. This includes accelerating investments in polysilicon, wafers, solar cells and battery cell manufacturing, while strengthening domestic production of cathode and anode materials, electrolytes and critical mineral processing. Sustained support for research and pilot-scale manufacturing of next-generation technologies should be prioritised. This includes perovskite-silicon tandem cells and advanced battery chemistries, ensuring India participates not only in today’s markets but also tomorrow’s innovations.
Policy support must also evolve. Trade measures such as the Basic Customs Duty, ALMM and anti-dumping duties should remain transitional tools that encourage domestic competitiveness rather than permanent protection. Deployment incentives for solar and battery storage should be progressively aligned with domestic manufacturing capacity, while international partnerships should focus on diversifying technology collaboration and securing resilient critical mineral supply chains instead of merely shifting imports from one country to another.
India has already proved that it can deploy renewable energy at scale. The next challenge is far more strategic: building the industries that power that transition. Replacing imported fossil fuels with imported solar cells and battery materials is not true energy independence—it is merely a new form of dependence.
The author works in the Agriculture Policy Sustainability and Innovation Team at the Indian Council for Research on International Economic Relations (ICRIER), a research-based think-tank.
The views and opinions expressed in this article are the author’s own, and do not necessarily reflect those held by pv magazine.
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