SUM OF PARTS. China manufactures 90 per cent of the wafers used globally in the production of solar panels

Despite the gains made in the manufacture of renewable energy modules, India continues to be dependent on supply chains that originate elsewhere, especially China. The Energy Technology Perspective 2026, released by the International Energy Agency, says that though India is almost fully self-sufficient in the assembling of equipment, it is dependent on imports for components such as wafers and polysilicon, which are used in the manufacture of solar panels.

The risks are obvious. The report hypothesises that a one-month halt in Chinese export of solar supply-chain components would cause an output loss of $1 billion at module production plants across the world, of which 40 per cent would be felt in India and Southeast Asia.

Specifically, wafer production is almost entirely concentrated in China — over 90 per cent global share — and any disruption would impact India’s module output in the absence of alternative comparable global suppliers.

China’s investments in the sector over the past few decades are showing up India in stark contrast when it comes to cost-competitiveness. Domestic solar photovoltaic module prices are currently at about $0.15/W, compared with China’s $0.09/W. Similarly, in the wind sector, domestic component costs are 20-25 per cent higher than imports, primarily due to the high cost of raw materials and expensive financing.

While India’s import duties and concessional custom duty certificates help protect domestic firms, they also increase costs for end-consumers, the IEA says.

Pluses and minuses

India’s infrastructure bottlenecks and high logistics costs find mention in the report. In the wind energy industry, while assembly-level local content is high, the manufacture of sub-components is limited in scale and capability, particularly for new, larger turbine models.

However, it’s not all gloom. The report also highlights India’s achievements in adding renewable energy capacity. Especially in financial year 2025-26, the country’s capacity additions in renewable energy were noteworthy.

Government data show that installed solar power capacity crossed the 150 GW mark. March alone witnessed a record 6.65 GW additions. In wind power, too, India installed a record 6.05 GW capacity — the highest ever — surpassing the 2016-17 record of 5.2 GW.

The IEA points out that in the solar PV sector, India is expected to witness the largest increase in global production share among all regions, from 3 per cent in 2024 to more than 10 per cent by 2035. Between 2022 and 2024, module and cell manufacturing capacity expanded threefold, and the country is expected to achieve a module trade surplus this year. By 2030, India is projected to add 70 GW of module capacity and reach near self-sufficiency in both module and cell production. India is also expanding into difficult upstream segments — wafer manufacturing capacity is projected to reach over 65 GW by 2030, while polysilicon capacity — which was zero in 2024 — is expected to rise to 25 GW.

Similarly, the wind energy sector is experiencing growing levels of indigenisation. Under the revised policies introduced in April 2025, local sourcing of blades, towers, gearboxes, and generators is mandatory for all new wind projects. The government aims to raise the share of local content from 64 per cent to 85 per cent by 2030 to ensure self-reliance.

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Published on April 13, 2026