India's effort to build a self-reliant solar manufacturing industry is causing widespread production disruptions as a shortage of domestically made solar cells forces panel factories to idle, threatening renewable energy investment and the country's ambitious 2030 clean energy targets.
India’s efforts to expand solar power capacity have encountered a major setback as domestic manufacturers face component shortages triggered by new regulations aimed at curbing reliance on Chinese imports, industry sources told Reuters.
The shortages have placed investments estimated at $4 billion in jeopardy. Since the legislation entered into force on June 1, nearly one-third of the country’s small and medium-sized solar module producers have ceased operations. This segment represents 60 percent of the overall industry.
One solar panel manufacturer reported significant difficulties stemming from the lack of locally available cells over the past three months. The producer anticipates that annual module output will fall sharply from 3.2 gigawatts to around 1 gigawatt under the new rules.
The regulation requires solar module makers to source cells exclusively from domestic producers. Industry representatives had cautioned authorities beforehand that insufficient local cell manufacturing would drive up module prices and hinder solar deployment. The annual shortfall in cell production stands at approximately 2.6 gigawatts, with Chinese imports previously supplying more than 90 percent of the cells used by Indian manufacturers.
India aims to reach 500 gigawatts of non-hydrocarbon power capacity by 2030. Solar power currently constitutes 29 percent of the country’s non-hydrocarbon generation capacity, with plans calling for expansion from the present 162 gigawatts to more than 292 gigawatts by the end of the decade.
Although domestic module manufacturing capacity totals around 200 gigawatts, cell production capacity is limited to just 27 gigawatts, raising concerns that the government’s solar targets could be compromised.
Originally reported by Crude Oil Prices Today | OilPrice.com on Jul 23, 2026.
