India’s solar manufacturing sector is preparing for a major expansion further upstream, with a substantial pipeline of polysilicon, ingot, and wafer manufacturing capacity. However, converting announced capacity into operational production before new domestic sourcing requirements take effect will be critical.

According to Mercom India’s PV Manufacturing Tracker, India’s polysilicon manufacturing pipeline of announced projects stands at 30 GW , although the country currently has no operational commercial production capacity. Under-development projects account for 14 GW of the pipeline, while 16 GW of projects have been announced.

Further downstream, India has only about 2 GW of operational solar ingot and wafer manufacturing capacity, while another 160.3 GW is in the pipeline. Of this, 53.10 GW is under development, and announced projects account for 107.20 GW.

The gap between operational and announced capacity is growing as India prepares to implement the Approved List of Models and Manufacturers (ALMM) List-III for wafers from June 1, 2028.

The Ministry of New and Renewable Energy (MNRE) has progressively extended domestic sourcing requirements across the solar manufacturing value chain.

Projects covered under the ALMM framework must source modules enlisted under ALMM List-I. Subject to applicable provisions and exemptions, these modules must use cells enlisted under ALMM List-II. Under the next phase, ALMM List-I modules covered by the List-III requirement will have to use ALMM-listed cells manufactured using wafers enlisted under List-III.

Importantly, ALMM List-III will not be issued until at least three independently owned wafer manufacturing units with a combined annual capacity of at least 15 GW are available. Wafer manufacturers seeking enlistment must also have equivalent ingot manufacturing capacity.

The framework therefore creates a direct localization requirement for wafers and associated ingot capacity, but it does not currently require domestic production of the polysilicon used to manufacture those ingots.

Manufacturing Mismatch

The government’s localization push has so far resulted in significantly higher manufacturing capacity at the module level than further upstream.

In August 2026, module manufacturing capacity enlisted under ALMM List-I reached 215,522 MW.

Solar cell manufacturing capacity has not expanded at the same pace. Capacity enlisted under ALMM List-II stood at 35,468 MW in August, equivalent to only about 16.5% of ALMM-listed module capacity.

The disparity reflects the different capital, technology, and execution requirements across the manufacturing value chain.

Module manufacturing involves relatively simpler assembly processes and lower capital requirements. Cell manufacturing is more capital- and technology-intensive, requires greater technical expertise, and continues to require investment as manufacturers transition to higher-efficiency technologies.

The challenge becomes greater further upstream, where India currently has very small ingot and wafer manufacturing and no operational polysilicon production.

Although the announced ingot and wafer pipeline is substantial, announced capacity alone will not resolve the supply-chain imbalance. Projects must achieve financial closure, secure technology and equipment, complete construction and commissioning, qualify under the ALMM framework, and ramp up production at commercially viable yields.

The distinction between announced and operational capacity will therefore become increasingly important as the June 2028 deadline approaches.

Race Against the Deadline

The List-III framework has been structured to provide a minimum supply base before the initial list is issued. MNRE requires at least three independent wafer manufacturers with a combined capacity of 15 GW before it can publish List-III.

However, 15 GW represents the threshold for issuing the list, not necessarily the capacity required to meet the industry’s eventual demand.

Projects must secure financing, procure equipment, complete construction and commissioning, and ramp up commercial production before they can supply domestic cell manufacturers.

If ingot and wafer manufacturing does not expand sufficiently, the industry could face another supply imbalance like the current module-cell mismatch.

Recently, MNRE Secretary Santosh Sarangi is considering a Production Linked Incentive (PLI) program for domestic polysilicon manufacturing, similar to the incentives extended to solar module and cell manufacturing.

While a PLI program could provide manufacturers access to capital to set up production facilities, such support would have been more effective if introduced alongside the localization mandate announcement. This would have given manufacturers enough time to build capacity before List-III takes effect.

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