India Plans $1 Billion Subsidy Scheme to Reduce Solar Industry's Dependence on China

According to reports, India is finalizing a $1 billion capital subsidy plan aimed at bolstering the country’s solar manufacturing sector. The move is part of a broader effort to reduce reliance on China and capitalize on global energy transition opportunities. The proposal, made by the Ministry of New and Renewable Energy, will target domestic wafer and ingot manufacturers, which represent the weakest segments of India's solar industry. The plan has received support from senior advisers in Prime Minister Narendra Modi’s office and is expected to be presented to the cabinet for approval in the coming months.
Currently, India is largely dependent on imports for solar equipment. Although India has developed 71 GW of module production capacity and nearly 11 GW of cell production capacity, wafer and ingot manufacturing is limited to just 2 GW, built by Adani Enterprises Ltd.
Industry insiders note that high logistics costs and quality control issues have kept wafer and ingot manufacturing costs high, and the subsidies will help ease this pressure. However, even with an increase in wafer and ingot capacity, India would still need to import the core raw material, polysilicon. According to BloombergNEF data, China dominates the global polysilicon market with an annual production capacity of 2.3 million tons, far outpacing second-ranked Germany, which has 75,000 tons. India currently has no capacity to refine polysilicon.