A new report from JMK Research and the Institute for Energy Economics and Financial Analysis (IEEFA) notes that while the solar PLI scheme has helped lay the groundwork for domestic PV manufacturing, it continues to face significant operational and policy challenges.
“The scheme channels government support towards measurable industrial output, helping build durable, long-term manufacturing capacity,” says Vibhuti Garg, Director, IEEFA South Asia, and a contributing author of the report.
According to the report, India’s solar manufacturing capacity has expanded significantly since 2022, with current operational capacity reaching 120GW for modules and 29.3GW for cells (as of June 2025). Post-2022 capacity additions totalled 82GW in modules and 22.7GW in cells, representing a 216% and 344% increase, respectively, from 2022 levels.
Whatever limited polysilicon and wafer capacities exist in India have come solely through the PLI scheme — underscoring India’s continued upstream dependence on imports — while about 36% of total cell and 24% of module capacity originate from PLI allocations.
“However, the PLI scheme for solar PV manufacturing faces implementation challenges like high capital intensity of upstream integration, inadequate incentives, inconsistencies in trade policy, import dependency, and global raw material price volatility,” says Prabhakar Sharma, senior consultant, JMK Research, and one of the report’s authors.
Policy asymmetries — such as unrestricted imports for polysilicon and wafers alongside module restrictions under the Approved List of Models and Manufacturers (ALMM) — and frequent ALMM revisions have created uncertainty for domestic manufacturers. Besides, the scheme’s emphasis on fully integrated wafer-to-module facilities requires steep upfront investments, while incentives cover only a small fraction of production costs.
“India’s reliance on imported machinery, components, and Chinese technical expertise has further slowed capacity ramp-up, a situation worsened by visa restrictions and limited equipment availability,” says Chirag H Tewani, senior research associate at JMK Research, and a co-author of the report.
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