What's Happening?
Chetan Shah, Chairman and Managing Director of Solex Energy, has called upon the Indian government to incentivize domestic production of solar equipment. This plea comes in response to China's proposed restrictions on the export of 12 key technologies
essential for photovoltaic module manufacturing. China's rationale for these restrictions is the dual-use nature of these technologies in sensitive sectors like aerospace and defense. Shah highlights that China currently dominates 75-90% of the global solar supply chain. India's current solar manufacturing landscape shows a significant disparity, with approximately 262 GW of module manufacturing capacity but only about 37 GW of cell capacity as of June 2026. The country's ingot-wafer capacity is estimated at 2 GW, with no polysilicon capacity. This reliance on foreign technology, particularly from China, poses a risk of supply crunch, project delays, and increased pressure on tariffs if the proposed curbs are implemented.
Why It's Important?
The potential supply crunch in solar equipment due to China's proposed export restrictions could significantly impact India's renewable energy goals and its 'Make in India' initiative. A lack of domestic cell capacity would hinder the production of solar modules, leading to delays in solar projects and potentially increasing energy costs. This situation underscores the vulnerability of India's solar industry to geopolitical shifts and its heavy dependence on a single foreign supplier. Incentivizing domestic production would not only mitigate these risks but also foster self-reliance, create jobs, and boost technological innovation within India. Furthermore, it would allow India to diversify its supply chain, reducing its exposure to external pressures and ensuring the stability of its energy sector. The current gap between module and cell capacity, coupled with the prevalence of older MONO PERC technology, further emphasizes the urgent need for strategic investment in advanced domestic manufacturing capabilities.
What's Next?
To address the impending challenges, Chetan Shah has proposed several immediate and long-term actions for the Indian government. He suggests extending the timeline of ALMM-II (Approved List of Models and Manufacturers) by at least 12 months and including all types of solar projects under its purview. This extension would provide local players with sufficient time to fulfill existing orders and allow manufacturers to establish cell capacities. Additionally, Shah recommends that the government engage in diplomatic discussions with China to protect already contracted and under-execution orders. For long-term solutions, he advocates for a dedicated Production-Linked Incentive (PLI) scheme or capital subsidy to support domestic manufacturing of critical PV equipment, spares, and consumables. This would involve partnerships with Indian capital-goods companies, CSIR labs, and IITs, alongside pursuing government-to-government technology partnerships with nations like the US, EU, Japan, Korea, and Taiwan to secure alternative sources of equipment and process technology. The government could also launch a specific mission or initiative focused on solar equipment manufacturing.
Beyond the Headlines
The situation highlights a broader global trend of nations reassessing their supply chain vulnerabilities, particularly in critical technology sectors. China's proposed export curbs on solar manufacturing technologies could be seen as a strategic move to maintain its technological edge and control over the global renewable energy market. For India, this presents an opportunity to accelerate its transition towards energy independence and strengthen its domestic industrial base. The emphasis on 'Make in India' in the solar sector could lead to significant advancements in research and development, fostering a robust ecosystem for renewable energy innovation. However, the challenge lies in rapidly scaling up domestic capabilities to match the existing demand and technological sophistication. This scenario also underscores the importance of international collaborations and diversified partnerships to ensure resilience in global supply chains, preventing any single nation from monopolizing essential technologies for critical infrastructure development.
