India's Solar Manufacturing: Booming Capacity and Emerging Challenges

India's solar module manufacturing capacity is projected to exceed 125 GW by 2025, driven by government incentives. However, overcapacity risks loom, exacerbated by declining US exports due to tariffs. Industry experts recommend focusing on cost-competitiveness and expanding into new export markets for sustainable growth.

India's solar module manufacturing is on track to surpass 125 GW by 2025, fueled by government Production Linked Incentive schemes. This marks more than three times the domestic demand of about 40 GW, leading to a potential surplus of 29 GW, Wood Mackenzie revealed.

Despite this growth, the industry now faces challenges including overcapacity. Declining exports to the US, due to new 50 per cent reciprocal tariffs, have resulted in a 52 per cent drop in module shipments in 2025's first half. Consequently, manufacturers are shifting focus back to the domestic market.

Experts argue that India must prioritize cost-competitiveness and explore export markets like Africa, Latin America, and Europe. Protective measures, like the Approved List of Models and Manufacturers (ALMM) and proposed anti-dumping duties on Chinese modules, aim to bolster domestic producers. Success hinges on R&D, technology investment, and market diversification.

(With inputs from agencies.)