New Delhi: India’s solar module manufacturing capacity is set to surpass 125 GW by 2025, more than triple the domestic demand of around 40 GW, creating an inventory surplus of 29 GW, according to Wood Mackenzie.
The surge has been fueled by the government’s Production Linked Incentive (PLI) scheme, which has spurred rapid factory expansion.
However, the industry now faces overcapacity risks, compounded by a sharp decline in exports to the United States, where new 50 per cent reciprocal tariffs caused module shipments to fall 52 per cent in the first half of 2025.
Several manufacturers have paused their US expansion plans and refocused on the domestic market.
Wood Mackenzie warned that cost competitiveness remains a challenge.
Indian-assembled modules using imported cells are at least USD 0.03 per watt more expensive than fully imported Chinese modules, while fully ‘Made in India’ modules could cost more than double their Chinese counterparts without government support.
Protective measures, including the Approved List of Models and Manufacturers (ALMM) and a proposed 30 per cent anti-dumping duty on Chinese modules, are being deployed to support domestic producers.
Experts say India has the potential to become a large-scale alternative to China’s solar supply chain, but long-term success will depend on R&D, technology investment, and diversification into export markets such as Africa, Latin America, and Europe.
Separately, CareEdge Advisory, a subsidiary of CareEdge Ratings, said India is likely to reach 216 GW of solar capacity by FY28, supported by PLI schemes that have already approved multiple tranches for integrated manufacturing across polysilicon, ingot, wafer, cell, and module stages.
It said the strong response to applications under these schemes is enabling rapid capacity expansion, while efficiency gains - where 1,700-2,200 panels (at 500Wp) are typically deployed for every 1 MW of solar power - are reinforcing scale advantages in project execution.