⚡ Quick Read
India’s renewable energy transition has achieved remarkable scale, with installed solar capacity poised for significant growth by June 2026. However, this progress is shadowed by a critical strategic vulnerability: an over-reliance on imported technology. While the nation is successfully reducing its dependence on fossil fuels, it has inadvertently traded one form of dependency for another. Approximately 80% of the equipment utilized in typical solar installations remains imported, with supply chains frequently tracing back to China, even when sourced through third-party nations.
The challenge is multifaceted, spanning both solar photovoltaics and Battery Energy Storage Systems (BESS). In the solar sector, over 90% of modules deployed in India utilize crystalline silicon technology. The manufacturing process involves four distinct stages: polysilicon production, ingot and wafer manufacturing, solar cell fabrication, and module assembly. While India has made strides in module assembly, the technologically intensive upstream stages—specifically wafer and cell production—remain largely absent from the domestic industrial base.
China currently dominates the global landscape, controlling over 80% of wafer manufacturing capacity and a significant share of module production. Recent trade data indicates that while imports of finished modules have declined due to domestic assembly growth, India has merely shifted its dependence upstream. Manufacturers are increasingly importing solar cells to assemble modules locally, often sourcing from Vietnam or Malaysia, which themselves rely on Chinese-origin wafers and investment. This creates a facade of diversification without true supply chain independence.
For EPC contractors and solar developers, this landscape necessitates a more sophisticated approach to procurement. The reliance on imported components exposes projects to global price volatility and geopolitical trade risks. As the government enforces measures like the Basic Customs Duty (BCD) and the Approved List of Models and Manufacturers (ALMM), developers must navigate a complex regulatory environment that prioritizes domestic content. EPCs must now account for potential supply chain bottlenecks and the shifting cost structures associated with transitioning from imported finished goods to domestically assembled, yet upstream-dependent, products.
The next phase of India’s energy transition will be defined by industrial depth rather than mere capacity additions. As BESS becomes essential for managing the intermittency of solar power, the government is likely to push for similar localization in battery cell manufacturing to avoid repeating the solar supply chain errors. For the broader India renewable energy sector, the goal is to build a self-sustaining ecosystem that can support the ambitious 2030 targets while insulating the domestic market from global supply chain shocks.
Aditya Pathre is the Founder of MVApulse and covers India’s renewable energy sector, including solar, wind, battery energy storage systems (BESS), green hydrogen, transmission infrastructure, renewable energy policy and competitive bidding. His reporting focuses on project developments, market trends, government policies and energy transition across India.
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