India's Solar Manufacturing Push Faces Setbacks as Panel Factories Close
India is encountering challenges in its efforts to boost domestic solar manufacturing, with several panel factories shutting down due to shortages of essential components. The issue stems from new legislation aimed at reducing reliance on Chinese imports for solar technology. Since the law took effect in June 2026, nearly a third of small and medium-sized module manufacturers have closed operations, putting $4 billion in investments at risk. The policy requires local producers to use domestically made cells, but current domestic cell production is insufficient to meet demand—creating an annual gap of about 2.6 GW. Previously, over 90% of these components were imported from China. Industry experts had warned that the new rules would raise costs and slow solar capacity expansion. India aims for a total non-hydrocarbon generation capacity of 500 GW by 2030, with solar currently at 162 GW out of an intended target of over 292 GW. However, local module production is limited to 27 GW in cell manufacturing despite having sufficient panel-making capability.
Topics: economic consequences India policy impact solar manufacturing