India is preparing a new production-linked incentive scheme to encourage domestic polysilicon manufacturing, taking its industrial policy deeper into the solar supply chain as New Delhi seeks to reduce its dependence on Chinese imports and build an integrated clean-energy manufacturing base.
Santosh Kumar Sarangi, secretary at India’s Ministry of New and Renewable Energy, said on Friday that the proposed programme could support more than 10 gigawatts of polysilicon production capacity. He did not disclose the size of the financial incentives.
The initiative would extend India’s existing manufacturing incentive strategy beyond solar modules and cells to polysilicon, one of the most critical upstream materials used to produce photovoltaic panels. India currently relies entirely on imports from China for polysilicon, leaving its rapidly expanding solar industry exposed to external supply and pricing risks.
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The move is part of a broader effort by the Indian government to establish a domestic solar manufacturing chain covering polysilicon, ingots, wafers, cells and modules. Those segments remain heavily concentrated among Chinese manufacturers, which have built dominant positions across much of the global photovoltaic supply chain.
Speaking at a Confederation of Indian Industry event in New Delhi, Sarangi said the policy would help reduce import dependence while strengthening India’s industrial capabilities as renewable energy deployment accelerates.
India has already committed 240 billion rupees ($2.52 billion) in manufacturing-linked incentives for solar modules and cells. The proposed polysilicon programme would move that policy further upstream, addressing one of the most important gaps in the country’s attempt to create an end-to-end solar manufacturing ecosystem.
The scale of India’s existing manufacturing base illustrates the speed of the buildout. The country has more than 200 GW of solar module manufacturing capacity and over 32 GW of solar cell capacity, according to Sarangi. Another 100 GW of cell manufacturing capacity is expected to come online within about a year.
New Delhi is also targeting at least 80 GW of domestic solar ingot and wafer manufacturing capacity by June 2028.
The expansion is closely tied to India’s renewable energy ambitions. The country is targeting 500 GW of non-fossil-fuel power capacity by 2030, a goal that will require a sustained increase in solar installations and a reliable supply of equipment and raw materials.
Building domestic polysilicon capacity could therefore have an impact beyond manufacturing statistics. Greater local production would give Indian solar manufacturers more control over their supply chains and potentially reduce exposure to disruptions in international trade, changes in Chinese export policy and fluctuations in global polysilicon prices.
The strategy also reflects a shift in India’s renewable-energy policy from simply increasing installed capacity to developing the industrial infrastructure needed to support that capacity.
China’s dominance remains the central challenge. Chinese companies have established large-scale production across virtually every major stage of the solar manufacturing chain, benefiting from economies of scale, established supplier networks and substantial manufacturing capacity.
India’s challenge will be to make its upstream manufacturing competitive rather than simply substituting imports with higher-cost domestic production. Polysilicon manufacturing is capital-intensive and requires significant quantities of electricity, specialized equipment and highly controlled production processes. The effectiveness of the proposed incentive scheme will therefore depend on whether it can attract investment at a scale large enough to achieve competitive production costs.
There is also a potential benefit beyond renewable energy. Sarangi said polysilicon has applications in semiconductor manufacturing, meaning investment in domestic production could eventually support industries beyond solar.
That gives the proposed scheme a wider industrial-policy dimension. India is simultaneously trying to expand renewable power, strengthen domestic manufacturing and establish itself as a larger player in the global semiconductor and advanced-technology supply chain.
If implemented at the proposed scale, the polysilicon programme would represent another step in India’s effort to move from being a major consumer and installer of solar technology to becoming a vertically integrated manufacturing hub. The immediate objective is to reduce reliance on Chinese imports, but the longer-term goal is to capture more of the value created across the global clean-energy supply chain.