Industry calls for fresh incentives and policy flexibility as India's widening solar cell capacity gap threatens project timelines, investment and renewable energy costs
China's proposed restrictions on 12 critical solar manufacturing technologies have raised concerns over India's renewable energy supply chain, prompting calls for stronger domestic production incentives and policy support to prevent equipment shortages, project delays and rising solar power costs. The development comes as India's solar module manufacturing capacity significantly outpaces domestic cell production, exposing a structural weakness in its clean energy expansion.
Chetan Shah, Chairman and Managing Director of Solex Energy, has urged the government to accelerate domestic manufacturing and reduce dependence on Chinese equipment and technology.
Speaking on the sidelines of Renewable Energy India Expo 2026 in Greater Noida, Shah warned that delays in expanding domestic cell manufacturing could disrupt module supplies and increase pressure on electricity tariffs. China currently controls an estimated 75–90 per cent of the global solar supply chain, according to Shah.
Domestic Capacity Gap Raises Supply Risks
India had approximately 262 GW of solar module manufacturing capacity as of June 2026, compared with just 37 GW of cell manufacturing capacity. Domestic ingot and wafer production stood at around 2 GW, while polysilicon manufacturing capacity remained absent. The imbalance highlights India's continued dependence on imported components despite substantial investment in module assembly.
Shah has recommended extending the Approved List of Models and Manufacturers (ALMM-II) implementation timeline by at least 12 months to allow domestic manufacturers additional time to establish cell production facilities. He also advocated dedicated production-linked incentives, capital subsidies and partnerships with Indian capital goods manufacturers, research institutions and technology providers. Such measures could strengthen domestic supply chains while supporting investment in higher-value manufacturing activities.
Global Trade Shifts Challenge Solar Investments
China's proposed export controls cover advanced technologies used in polysilicon, wafer and solar cell manufacturing, including next-generation photovoltaic processes. The proposed restrictions could increase equipment procurement costs and delay manufacturing expansion, particularly for Indian companies investing in advanced cell technologies.
A JM Financial assessment suggests that the restrictions could encourage India's long-term manufacturing localisation, although near-term disruptions may affect commissioning schedules and capital expenditure. From an economic perspective, greater domestic manufacturing could create industrial employment, attract technology investment and reduce import dependence.
However, higher production costs and technology-access constraints could weaken the competitiveness of locally manufactured solar equipment. Shah has also called for stronger technology partnerships with the US, European Union, Japan, South Korea and Taiwan to diversify sourcing. For India, the challenge is to balance manufacturing self-reliance with affordable solar power deployment. Sustained policy support, technology access and timely capacity expansion will be critical to protecting renewable energy investments and maintaining the country's clean energy growth momentum.
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