Despite advancements in renewable energy module manufacturing, India remains reliant on supply chains originating primarily from China. According to the Energy Technology Perspective 2026 report by the International Energy Agency (IEA), while India has achieved near self-sufficiency in equipment assembly, it still depends on imports for essential components such as wafers and polysilicon used in solar panel production.
The implications of this dependency are significant. The IEA report posits that a one-month halt in Chinese exports of solar supply chain components could result in a $1 billion loss in output at module production plants worldwide, with 40% of this impact felt in India and Southeast Asia. Wafers, which make up more than 90% of global production and are predominantly manufactured in China, are critical; any disruptions could severely affect India’s module output due to a lack of comparable global suppliers.
China’s substantial investments in the renewable energy sector over the years have rendered it far more cost-competitive than India. Current solar photovoltaic module prices in India stand at approximately $0.15 per watt, while Chinese prices are around $0.09 per watt. The wind sector suffers similarly, with domestic component costs being 20-25% higher than imports, largely due to elevated raw material costs and financing expenses. While India’s import duties and concessional custom duty certificates aim to support domestic firms, they inadvertently increase costs for end consumers.
The IEA report also highlights challenges such as infrastructure bottlenecks and high logistics costs. In India’s wind energy industry, even though local assembly levels are high, the production of sub-components is limited, particularly for newer turbine models.
On a more positive note, the report acknowledges India’s progress in increasing renewable energy capacity, especially during the financial year 2025-26. Official data indicates that installed solar power capacity surpassed 150 GW, with a remarkable addition of 6.65 GW in March alone. Wind power also achieved new heights, with 6.05 GW of capacity added, exceeding the previous record of 5.2 GW set in 2016-17.
The IEA predicts that India will experience the most significant increase in global solar production share among all regions, escalating from 3% in 2024 to more than 10% by 2035. From 2022 to 2024, module and cell manufacturing capacity in India expanded threefold, and the nation is projected to achieve a module trade surplus this year. By 2030, India aims to add an additional 70 GW of module capacity and reach near self-sufficiency in both module and cell production. Furthermore, India is set to increase wafer manufacturing capacity to over 65 GW and expects polysilicon capacity to rise to 25 GW by 2030, up from zero in 2024.
The wind energy sector is also witnessing a trend towards greater indigenization. Revised policies introduced in April 2025 mandate local sourcing of essential components, including blades, towers, gearboxes, and generators, for all new wind projects. The government intends to elevate the local content share from 64% to 85% by 2030 to bolster self-reliance.
Published on April 13, 2026.
