In a major policy shift aimed at curbing import dependence, the government on Wednesday mandated that all solar projects use locally manufactured ingots and wafers from June 1, 2028, extending domestic sourcing rules to the most import-dependent segment of the solar supply chain.
The move, notified by the Ministry of New and Renewable Energy (MNRE), expands the Approved List of Models and Manufacturers (ALMM) framework beyond modules and cells to upstream components, where India remains heavily reliant on imports, largely from China.
Solar panels are made up of modules that contain cells. Cell manufacturing depends on ingots, which in turn require wafers. India currently has around 2 GW of ingot and wafer manufacturing capacity, even as solar deployment continues to accelerate. The new mandate will apply across utility-scale, open access and net-metering projects, with future bids required to comply.
Vertical Integration
To avoid supply disruption, the government will notify eligible manufacturers only after at least three independent players with a combined capacity of 15 GW are operational. Companies will also be required to have integrated manufacturing capability across ingots and wafers, pushing the sector towards scale and vertical integration.
Union Minister for New and Renewable Energy Pralhad Joshi said the decision aims to deepen domestic manufacturing. “The move will boost domestic production, enhance supply chain resilience, reduce import dependence, and ensure higher quality standards across the solar value chain,” he said.
Industry executives said the policy signals a decisive shift towards upstream localisation. Srivatsan Iyer, Global CEO of Hero Future Energies, said the move strengthens the ecosystem but requires careful execution. “This is a significant step towards strengthening India’s renewable ecosystem… however, capacity build-up and ecosystem readiness will be critical,” he said.
Industry Outlook
Industry executives said the policy signals a decisive shift towards upstream localisation. Srivatsan Iyer, Global CEO of Hero Future Energies, said the move strengthens the ecosystem but requires careful execution. “This is a significant step towards strengthening India’s renewable ecosystem…however, capacity build-up and ecosystem readiness will be critical,” he said.
Prashant Mathur, CEO of Saatvik Green Energy, said the decision reinforces India’s intent to control its supply chain. “This is a bold affirmation that India is determined to own its solar supply chain, cut import dependencies, and generate high-quality manufacturing jobs at scale,” he said.
However, industry bodies flagged the scale of investment required. Subrahmanyam Pulipaka, CEO of NSEFI, said timely capacity creation will be key. “The successful implementation… is closely dependent on the timely creation and scaling of domestic ingot and wafer manufacturing capacity,” he said, calling for viability gap funding support.
The industry has proposed ₹20,000–25,000 crore in support to build 50 GW of upstream capacity, along with additional incentives for domestic equipment manufacturing.
The ALMM framework, introduced in 2019, has already driven downstream expansion. Since its rollout, domestic capacity has scaled up sharply, with module manufacturing rising from 8.2 GW in 2021 to 172 GW, while cell capacity has reached 27 GW within seven months, reflecting rapid industry expansion.