By Amit Kapoor and inputs from Meenakshi Ajith
The energy transition has produced two kinds of winners so far: countries that manufacture and countries that install. India has become exceptional at the latter, but the former is where the real contest is beginning. It is a distinction worth holding onto as India celebrates 150 gigawatts of installed solar capacity, a milestone that arrived faster than almost anyone predicted. The National Solar Federation of India further projects that the country will become the world’s second largest solar market by annual installations before this year is out, displacing both the United States and theEuropean Union. The IEA’s Global Energy Review in 2026, confirmed that solar PV led all individual energy sources in contributing to global demand growth in 2025 for the first time in recorded history, adding 600 terawatt-hours of new generation, the largest increase by any single source outside of post-crisis rebound years. India commissioned 44.6 gigawatts in a single fiscal year and is inevitably a key player in this story.
What the gigawatt figures don’t capture is where the work remains. India’s direct import trade data is a good place to start this assessment. In FY2023, India imported 692 million solar cells from China. In FY2026, it imported 5.34 billion. Not because Indian industry failed, but precisely because it succeeded. India’s enlisted solar module manufacturing capacity grew from 8 gigawatts in 2021 to over 100 gigawatts by mid-2025 under the ALMM framework, one of themost rapid industrial buildouts in the history of clean energy. Feeding that capacity meant sourcing cells at a scale andprice point that, for all practical purposes, only one country could offer, namely China. So, between FY2023 andFY2026, even as finished panel imports from China collapsed by over 85% in value, from ₹23,678 crore to ₹3,430 crore, cell imports from China rose 75% in value and nearly three times in volume. The total solar import bill tells its own story: ₹19,669 crore in FY2023, peaking at ₹54,208 crore in FY2024 as India rushed to commission projects ahead of tightening domestic content rules, and moderating to ₹31,572 crore in FY2026. Therefore, even when the composition of the imports changed, the underlying dependency remains unchanged.
Move one step further up the supply chain and the picture sharpens considerably. Undiffused silicon wafers, thesubstrate from which solar cells are made, more than doubled in import volume between FY2025 and FY2026, with China supplying over 99% of India’s needs. This is simply where the current buildout ends and the next one needs to start.
There are early signals of diversification at the margins worth noting. Indonesia, which barely registered in India’s cell import data two years ago, supplied ₹2,186 crore worth of cells in FY2026. Ethiopia, improbably, emerged as an entirely new source at ₹1,396 crore, essentially from zero the prior year. Thailand and Vietnam also hold meaningful shares. While the supply base is not static, it is also worth stepping back to note that this challenge is not uniquely India’s. China produced 92% of cells and 85% of finished panels as recently as 2023. India, Indonesia and Turkey together account for 75% of China’s cell exports in 2025, hence every major solar market is navigating the same upstream dependency. India, however, with its growth aspirations need to think deeply about building resilience.
The Indian government is aware of this, which is why the June 1, 2026 deadline for ALMM List II has become one of the most watched policy moments in Indian solar this year. The rule is straightforward: from that date, every module used in government-backed, open-access and net-metering projects must be made with cells sourced from an approved Indian manufacturer. What List I did for modules by forcing a domestic manufacturing buildout that few thought achievable at the time; List II is now attempting for cells. The challenge is that the two transitions are not equivalent. India has around 27 to 28 gigawatts of total installed solar cell manufacturing capacity behind an enlisted module assembly base that has crossed 100 gigawatts, and the gap is not simply a question of investment. Newly commissioned cell lines, as developers point out, typically need six to eight months to stabilise before they can deliver the consistency that large-scale project execution demands. Manufacturers who have committed capital on the basis of the June deadline see any extension differently as an erosion of the policy certainty that justified their investment in the first place. How that tension resolves will shape not just this deadline, but the credibility of every upstream policy signal that follows it.
Behind the immediate policy debate sits a structural reality that no single deadline can resolve. The IEA in 2026, noted that China controls over 95% of global wafer production. When Beijing imposed export controls on seven heavy rare earth elements in April 2025, the solar sector was spared. The lesson, however, was not subtle: concentrated supply chains are concentrated risk, and the concentration in solar runs deep. India has spent the better part of a decade building a solar industry to reduce its historic dependence on fossil fuel imports. The logic that drove India to build solar in the first place, reducing exposure to concentrated external supply, applies just as much to the cells and wafers inside those panels as it does to the fossil fuels they are replacing.
None of this diminishes what India has built, or the speed at which it has built it. India added more solar in FY2026 than most countries have built in total. The compression of time in its solar story reflects something real about what thecountry can do when policy, capital and industrial ambition align. What comes next is upstream. Cells, then wafers, then ingots, then polysilicon. The government has already signalled ALMM List III for wafers by 2028. The direction is unambiguous, but question is whether India can move up that chain fast enough to matter, before the geopolitics of clean energy hardens into a structure as difficult to escape as the one it is trying to leave behind.
(Amit Kapoor is chair, Institute for Competitiveness. X:@kautiliya. With inputs from Meenakshi Ajith).
The article was published with Financial Express on June 14, 2026.
