India has made significant progress in building domestic solar manufacturing capacity, rapidly expanding module production and scaling up cell manufacturing over the past few years. Yet the country's biggest dependence remains further up the value chain. Wafers and ingots, the critical inputs used to manufacture solar cells, continue to be largely imported, leaving India's clean energy ambitions exposed to overseas supply chains.
By extending the Approved List of Models and Manufacturers (ALMM) framework to wafers and ingots from June 2028, the government is taking its localisation strategy further upstream, seeking to reduce import dependence in one of the most strategic segments of the solar industry. The localisation push comes as India works towards its target of 500 GW of non-fossil fuel capacity by 2030, requiring sustained deployment of domestically manufactured solar equipment.
The Hardest Phase Of Localisation Begins Upstream
Industry executives agree that India has made considerable progress in module manufacturing and continues to expand domestic cell production. The next challenge, however, lies further upstream, where domestic manufacturing remains limited despite rapidly growing demand.
Ateesh Samant, Chief Operating Officer, Oyster Renewable Pvt. Ltd., said the June 2028 timeline provides manufacturers with sufficient visibility to deepen domestic manufacturing capabilities. "Wafers and ingots are where India's import dependence is currently the deepest," he said, noting that strengthening these segments would reduce exposure to global supply disruptions, exchange-rate volatility and concentration risks while advancing the country's broader energy security and Atmanirbhar Bharat objectives.
Hanish Gupta, Managing Director, Sunkind India Limited, said India has already demonstrated its ability to scale module manufacturing and is gradually expanding cell capacity, but "the main gap now lies in wafers and ingots." He said the next two years would be crucial as manufacturers establish technology partnerships and build large-scale facilities capable of meeting future domestic demand.
Executives believe the significance of the policy extends beyond compliance with ALMM norms. By encouraging domestic production in the most import-dependent segment of the value chain, the policy seeks to determine whether India can evolve from being primarily a solar assembler into a manufacturer of the technologies that underpin the industry.
Building Capacity Will Require More Than Factories
While the policy provides a long-term demand signal, industry leaders caution that manufacturing competitiveness cannot be achieved through capacity additions alone.
Samant said periodic stock-taking of wafer and ingot capacity against projected demand would help ensure the transition remains on course, with room for calibrated policy adjustments if required. Drawing lessons from India's rapid expansion of domestic cell manufacturing, he said implementation should remain flexible enough to support sustained industry growth without disrupting project execution.
Gupta similarly argued that bringing wafers and ingots under ALMM is only one step towards genuine manufacturing self-reliance. He said India must also strengthen domestic capabilities in polysilicon, manufacturing equipment and process technology if it wants to establish a fully integrated upstream solar ecosystem.
The broader consensus across the industry is that localisation must ultimately extend across the supply chain rather than stopping at wafers and ingots alone.
Fresh Investment Cycle Expected
Developing competitive wafer and ingot manufacturing will require one of the largest investment cycles the sector has seen, given the capital-intensive nature of upstream production.
Vinay Rustagi, Chief Business Officer, Premier Energies, said the policy could attract investments of up to Rs 50,000 crore to create nearly 80 GW of domestic wafer and ingot manufacturing capacity over the next three years. "The ALMM 3 policy is designed to break China's complete monopoly on the global ingot-wafer industry and improve India's energy security," he said, while adding that government support for domestic technology and supply-chain capability would be essential to realise the opportunity.
Samant said the policy sends a clear long-term demand signal that is expected to catalyse fresh capital expenditure across the value chain. Gupta added that the announcement is likely to encourage both established manufacturers and new entrants to commit long-term investments in upstream production as policy certainty improves.
Balancing Self-Reliance With Renewable Growth
Industry leaders acknowledge that localisation is likely to increase manufacturing costs during the initial years as domestic upstream capacity is established. However, they argue that the larger objective is to build a resilient and globally competitive manufacturing ecosystem capable of supporting India's long-term renewable energy ambitions.
Rustagi said domestically manufactured wafers are expected to remain more expensive than imported products initially because Chinese manufacturers continue to benefit from significant economies of scale and government support. Over time, however, he expects the cost differential to narrow while being offset by stronger supply security and lower transaction costs.
For project developers, executives say the priority is ensuring localisation does not create new supply bottlenecks that slow renewable energy deployment. Samant said adequate module availability and supply-chain stability will be critical to ensuring project execution timelines remain unaffected as India expands domestic manufacturing. He also stressed that localisation should extend beyond wafers and ingots to raw materials, ancillary components and supporting infrastructure if the country is to build a resilient solar value chain.
Gupta echoed that view, saying the objective should not simply be to replace imports with higher-cost domestic production, but to build a reliable, efficient and globally competitive manufacturing ecosystem capable of supporting India's renewable energy ambitions without excessive reliance on overseas suppliers.
The industry's message is clear; India has already proven it can manufacture solar modules at scale. The bigger test now lies upstream. Success will not be determined by how many panels the country assembles, but by whether it can manufacture the critical components that define technology ownership, supply-chain resilience and long-term competitiveness. If implemented successfully, the expansion of ALMM to wafers and ingots could mark the point at which India's solar manufacturing story shifts from localisation to genuine industrial self-reliance. |
