India has taken another decisive step to reduce its dependence on China in the solar sector. After targeting imported modules and cells in recent years, the Ministry of New and Renewable Energy has now extended the Approved List of Models and Manufacturers framework to cover solar ingots and wafers.

These upstream components are critical to the solar manufacturing chain, and the new rules will come into effect from 1 June 2028. Once implemented, all solar projects, including net‑metering and open‑access projects, will be required to use wafers listed under the approved domestic framework.

This is being seen as India’s most direct attempt yet to challenge China’s dominance in the global solar supply chain.

Solar panels are the visible end product, but the chain begins with polysilicon, which is converted into ingots. Ingots are sliced into wafers, wafers are turned into cells, and cells are assembled into modules. India has made progress in module manufacturing and is expanding cell production, but wafers and ingots remain its weakest link. This dependence has given China enormous leverage over global solar supply chains.

China’s dominance in solar manufacturing is unparalleled. The International Energy Agency notes that China controls more than 80 per cent of global manufacturing capacity across every major stage of solar panel production, including polysilicon, ingots, wafers, cells and modules.

Over the past decade, the country has invested more than $50 billion in solar manufacturing capacity. The dominance is most pronounced in wafers, where China accounts for roughly 95–97 per cent of global production capacity. Its scale, low‑cost financing, subsidies and integrated supply chains have enabled it to become the cheapest supplier of solar equipment worldwide. In the first half of 2024 alone, China exported a record 120 GW of solar modules after aggressively cutting prices.

India has reduced reliance on imported modules through the Production Linked Incentive scheme, customs duties and earlier ALMM requirements. Yet dependence on China remains significant, especially for cells, wafers and upstream materials.

Reports show that while China’s share in India’s solar cell imports fell to 56 per cent and its share in module imports declined to 65 per cent in FY24, India still relies heavily on imports for wafers because domestic commercial‑scale wafer production has not yet begun.

Official trade data revealed that imports of Chinese solar cells surged 141 per cent year‑on‑year in FY25 despite restrictions on modules, underlining how deeply India’s upstream supply chain remains tied to China. This is the gap the government now seeks to close.

Industry leaders argue that the reform is about more than manufacturing; it is about energy security. Vinay Rustagi of Premier Energies said the ALMM‑3 policy is designed to break China’s monopoly on the ingot‑wafer industry and improve India’s energy security.

He expects investments of up to ₹50,000 crore over the next three years, potentially creating 80 GW of wafer and ingot manufacturing capacity, enough to meet domestic demand.

Rustagi acknowledged that locally produced wafers may initially cost more than imports, but he believes the gap will narrow as India’s ecosystem matures. He emphasised that long‑term benefits such as supply security, reduced transaction risks and domestic capability creation could outweigh higher initial costs.

Others caution that execution will be critical. Hanish Gupta of Sunkind India Limited described ALMM‑3 as the right policy in principle but warned that implementation would be challenging. He noted that while India has built module manufacturing capacity and is rapidly adding cell production, wafers and ingots remain the weakest links.

Extending ALMM to these segments sends a strong signal that India’s clean‑energy ambitions must be backed by deeper manufacturing capabilities rather than assembly alone. Gupta believes the policy could attract investment, technology partnerships and greater backward integration, but he cautioned that India currently lacks adequate commercial‑scale wafer and ingot capacity to meet demand. 

Building such capacity will require large capital investments, technology access, competitive costs and policy stability. He warned that overly aggressive timelines could lead to supply constraints, higher costs and project delays.

The stakes are high. India has set a target of achieving 500 GW of non‑fossil fuel power capacity by 2030, with solar expected to account for a major share. Securing the supply chain is therefore as important as installing new capacity.

Earlier interventions helped create a domestic module manufacturing industry that barely existed a few years ago, and India’s module manufacturing capacity has already crossed 90 GW. The next battle lies upstream.

By bringing wafers and ingots under the ALMM framework, New Delhi is signalling that assembling imported components will no longer be sufficient. The policy represents a strategic push to build a fully integrated domestic solar manufacturing ecosystem, reduce reliance on China and strengthen India’s long‑term energy security.

Agencies