India is preparing a production-linked incentive scheme to encourage domestic polysilicon manufacturing, as announced by MNRE Secretary Santosh Kumar Sarangi at the seventh Confederation of Indian Industry International Energy Conference and Exhibition. The scheme would extend India's manufacturing incentive push deeper into the solar supply chain and reduce import dependence, with the new scheme potentially covering more than 10 GW of production capacity. Polysilicon sits at the top of the solar manufacturing chain, processed into ingots and then cut into wafers for solar cells, making it a key raw material currently sourced entirely from abroad. This development comes as India currently imports all its polysilicon from China, making the proposed PLI scheme crucial for strategic supply chain independence. The government has previously offered ₹240 billion rupees ($2.52 billion) in manufacturing-linked incentives for solar panel and cell production, and the new polysilicon scheme would be separate from that programme, targeting an area where India currently has no meaningful domestic capacity.
India is set to achieve 100 gigawatts (GW) of solar cell manufacturing capacity within a year, representing a significant increase from the current 32 GW capacity, according to MNRE Secretary Santosh Kumar Sarangi. The expansion will also include 80 GW of wafer and ingot capacity by June 2028, when the approved list of models and manufacturers policy for these upstream components comes into effect. As per The Indian Express, India has already built more than 200 GW of solar panel manufacturing capacity and over 32 GW of solar cell capacity, with another 100 GW of cell capacity expected to come online within about a year. The government is developing a support scheme to encourage polysilicon manufacturing in the country to further deepen India's solar supply chain, with the proposed scheme targeting more than 10 GW of polysilicon manufacturing capacity through a production-linked incentive (PLI) scheme. This shift represents a move from building primarily downstream assembly capacity towards establishing an end-to-end solar manufacturing ecosystem covering polysilicon, ingots, wafers, cells and modules. India's existing PLI scheme for solar PV modules spans both ends of this chain, covering ingots, wafers and polysilicon upstream, and cells and modules downstream, but uptake in the upstream segments has lagged, as noted by The Indian Express.
India has crossed 300 GW of non-fossil fuel-based power generation capacity installations by the end of July, positioning itself as the third-largest renewable energy market globally, according to MNRE Secretary Santosh Kumar Sarangi. The country is on course to meet its target of 500 GW of non-fossil fuel energy installation by 2030. In solar manufacturing, India stands as the second largest solar module manufacturer in the world with more than 213 GW of installed capacity, while in wind energy, almost 85% of manufacturing is indigenised with 24 GW of manufacturing capacity in the country. The latest round-the-clock renewable energy bid provides for 90% assured power availability in each time block, with solar accounting for only 50% of supply during daytime, demonstrating the growing competitiveness of renewable energy. India's 500-GW target has made solar manufacturing strategically important because solar is expected to account for a large share of new capacity additions over the remainder of the decade.
The average power procurement cost (APPC) for distribution companies (discoms) is expected to decrease from ₹5.20 per unit currently to ₹4.85 per unit with increased adoption of combinations such as solar and wind, solar and battery energy storage (BESS), and round-the-clock renewable energy (RE RTC), as reported by MNRE Secretary Santosh Kumar Sarangi. The APPC for discoms at a national level has either remained stagnant or declined in the past three years due to the infusion of cheaper renewable energy into their portfolio. Solar Energy Corporation of India's (SECI's) latest tender for RE round-the-clock (RTC) power with 90 per cent assured availability in each time block discovered a price of ₹5.25 per unit, with the secretary noting that this tariff almost matches nuclear power. He commended developers for designing systems with confidence that ₹5.25 is an inflation-proof price for supply over the next 25 years. The tariff demonstrates the growing competitiveness of renewable energy and the ability of developers to integrate solar, wind and storage technologies to provide reliable power.
Deeper domestic manufacturing would strengthen India's clean energy ambitions and industrial competitiveness, as noted by MNRE Secretary Santosh Kumar Sarangi. The proposed polysilicon scheme would be separate from the existing ₹24,000 crore PLI programme for high-efficiency solar modules, which has selected manufacturers for 8.74 GW under its first tranche and 39.6 GW of fully or partially integrated capacity under the second. Polysilicon also has semiconductor applications, potentially broadening the economic benefits of new investment beyond solar manufacturing. The Centre is preparing an incentive scheme to support domestic polysilicon manufacturing, taking its localisation push deeper into the solar supply chain as it seeks to reduce dependence on imports, particularly from China. Reducing import dependence has become more important as India accelerates solar installations to meet its target of 500 GW of non-fossil fuel power capacity by 2030.
