The government has expanded domestic sourcing requirements for solar equipment to cover wafers and ingots, effective from June 2028. This policy targets government-supported utility-scale projects, commercial and industrial initiatives, and programs like PM Surya Ghar.
Current and Upcoming Mandates
Existing rules focus primarily on solar PV modules, allowing imports of components such as cells, wafers, ingots, and polysilicon. The mandate for domestically produced solar cells takes effect in June this year.
Reducing Import Reliance and Boosting Local Production
The expansion seeks to lessen dependence on imported wafers and ingots while strengthening domestic manufacturing. India boasts 172 GW of solar module capacity and 27.2 GW for cells, but ingot and wafer production remains limited at about 2 GW.
Wafers play a key role in the solar value chain: polysilicon forms ingots, which are sliced into wafers for cell production, then assembled into modules.
Rollout Framework for Domestic Wafers
An office memorandum from the Ministry of New and Renewable Energy (MNRE) states that the approved list of domestic wafer manufacturers will activate once three independent facilities—without shared ownership—achieve a combined 15 GW capacity.
MNRE will introduce ALMM List-III for wafers, similar to existing lists for modules (List-I) and cells (List-II). Wafer manufacturers must match their ingot production capacity to qualify.
Projects must source modules from List-I makers using cells from List-II and wafers from List-III. Transitional exemptions apply: bids submitted on or before the cut-off date—seven days after the first wafer ALMM list publishes—are exempt from wafer rules. Projects with pre-cut-off bids or power purchase agreements (PPAs) retain this relief, even for later tenders.
Post-cut-off tenders must specify sourcing from all three ALMM lists.
Challenges in Upstream Manufacturing
Despite advances in module production, upstream areas like polysilicon refining, ingots, and wafers struggle due to high capital needs and competitive pricing from China.
The Production Linked Incentive (PLI) scheme supports both upstream (ingots, wafers, polysilicon) and downstream (cells, modules) segments. Launched in March 2021 with Rs 4,500 crore, it expanded in 2022 by Rs 19,500 crore to total Rs 24,000 crore, targeting 65 GW of integrated capacity.
A December 2025 reports the Institute for Energy Economics and Financial Analysis (IEEFA) and JMK Research highlights execution gaps: overall PLI operational capacity reached 29% by June 2025. Modules led at 59%, while cells hit 22%, wafer-ingot 10%, and polysilicon 14%. About 36% of cell capacity and 24% of modules stem from PLI allocations.
MNRE data shows FY25 imports: solar PV cells at $1,641 million, wafers at $156 million, and polysilicon at $0.03 million.
MNRE Secretary Santosh Kumar Sarangi stated in January that discussions with the Ministry of Finance are underway for a new capital subsidy scheme targeting segments like wafers and ingots.
