The Union Budget may provide ₹5,000–6,000 crore in incentive support for domestic manufacturing of solar ingots and wafers, as the government looks to strengthen India’s upstream solar supply chain, officials familiar with the discussions said.
The proposed outlay is being examined as part of a possible incentive or PLI-linked framework aimed at reducing import dependence in critical components and improving supply-chain resilience in the renewable energy sector.
“The focus is on upstream manufacturing,” an official said on the condition of anonymity, adding that discussions are ongoing and no final decision has been taken.
According to officials, the support may be structured to encourage fresh investments in ingot and wafer manufacturing, which are essential inputs for solar cell production. India currently relies largely on imports for these components, even as domestic solar deployment and downstream manufacturing continue to scale up.
Rapid Capacity Expansion
Data shared by the Ministry of New and Renewable Energy (MNRE) shows that India has expanded its solar manufacturing base over the past decade.
Solar cell manufacturing capacity increased from 1.2 GW in 2014 to 27 GW in 2025, while solar module manufacturing capacity rose from 2.3 GW in 2014 to 144 GW in 2025. In 2025 alone, India added 81 GW of module manufacturing capacity.
Officials said this scale-up has been supported by policy measures such as the Approved List of Models and Manufacturers (ALMM), which mandates the use of domestically manufactured modules in government-supported projects.
While the ALMM framework has boosted cell and module manufacturing, it does not directly cover upstream segments such as ingots and wafers.
The government has also rolled out a Production Linked Incentive (PLI) scheme for high-efficiency solar PV modules, which has resulted in investment commitments across the cell and module value chain. However, ingot and wafer manufacturing has so far remained outside the scope of large-scale incentive programmes.
Bridging Manufacturing Gaps
An official said the proposed Budget support is intended to address this gap through targeted incentives or a separate PLI-type intervention focused on upstream manufacturing. “Without upstream manufacturing, the ecosystem remains incomplete,” the official said.
India added 35 GW of solar generation capacity in 2025 as part of its push towards the target of 500 GW of non-fossil power capacity by 2030. Strengthening domestic manufacturing across the value chain is viewed as a key pillar of this strategy.
From a low base in 2014, India’s solar manufacturing sector has expanded sharply over the past decade. Officials said Budgetary incentive support for ingots and wafers would seek to extend this expansion upstream and deepen the domestic solar manufacturing ecosystem.