India's strategic push for cleantech manufacturing and renewable energy growth

The solar supply chain will remain highly import-dependent unless a significant push is made for enhanced investments in manufacturing.

By Bhupinder S. Bhalla 

As part of India’s commitment to sustainable development, the Budget for 2025-26, presented by the Finance Minister, has outlined development measures across ten broad areas, including boosting manufacturing and furthering the "Make in India" initiative.

India has made remarkable progress towards the 500 GW non-fossil power capacity goal announced at COP26. The renewable energy (RE) capacity in the country has crossed 209 GW. Due to significant steps taken by the government, boosting the confidence of RE players, the RE capacity addition has picked up rapid pace, with an addition of 29 GW in calendar year 2024, more than double what was added in the entire year of 2023. All indications suggest that the country will more than double its capacity addition in FY25 as well, reaching over 30 GW on a year-on-year basis—a fitting response to those who have doubted whether we can achieve this landmark.

Meanwhile, solar manufacturing has witnessed exponential growth. The solar PV module manufacturing capacity listed under the ALMM now amounts to over 67 GW, compared to around 18 GW two years ago, with another 10-15 GW capacity in the process of enlistment. In solar PV cells, the current capacity is understood to be between 18-24 GW, while the first wafer capacity of 2 GW is already operational. In the next 2-3 years, India is expected to have a manufacturing presence across the entire value chain – polysilicon, ingots/wafers, cells, and modules. However, with another 270+ GW of RE capacity targeted for completion by 2030, capacity additions need to reach at least 50 GW per annum. To be truly "Atmanirbhar," India must have sufficient manufacturing capacity across the value chain to support this installation.

Despite the capacities being developed under the PLI for solar PV modules and elsewhere, the solar supply chain will remain highly import-dependent unless a significant push is made for enhanced investments in manufacturing polysilicon, ingots/wafers, and cells in the country. Even in wind turbine manufacturing, although India has over 18 GW of annual capacity—more than enough for the expected capacity addition of around 5 GW in the current fiscal—it is still far from full indigenisation. In fact, the recent Bharat Climate Forum 2025 highlighted that import dependence across renewable energy, electric mobility, and other cleantech sectors' value chains varies between 20% and 90%, exposing the nation to vulnerabilities in terms of price volatility and supply chain disruptions.

In this context, the National Manufacturing Mission announced in the Budget, which will also support cleantech manufacturing in the country, is extremely timely. The Mission’s focus is clear: improve domestic value addition and build an ecosystem for the cleantech supply chain—solar PV cells, wind turbines, electrolyzers, batteries (both for utility-scale and EVs), and other key products like motors, controllers, and very high-voltage transmission equipment.

As per the announcement, the government plans to implement the Mission by covering small, medium, and large industries “through policy support, execution roadmaps, and a governance and monitoring framework for central ministries and states.” While the period over which the Mission will be implemented is currently unclear, an outlay of Rs 100 crore has been earmarked for it in FY 2025-26.

DPIIT will lead the implementation of the Mission, but for it to succeed, it will be important to adopt a whole-of-government approach in strong partnership with the private sector. The government must be prepared to overcome the numerous challenges likely to arise in this ambitious endeavour—building and scaling up indigenous technology, investing in focused R&D, increasing the availability of finance, providing access to critical inputs, and preparing a skilled workforce or reskilling the existing one to operate high-tech manufacturing facilities. Only such a comprehensive approach will result in a domestic cleantech industry with the requisite capacities, competitive enough to face the world.

(Bhupinder S. Bhalla, Former Secretary, Ministry of New & Renewable Energy, Government of India.)

Views are personal and do not represent the stand of this publication.