India could account for half of global module manufacturing capacity outside China by 2030, according to a new IEA report
The country could have around 135 GW of surplus module manufacturing capacity available for exports by 2030, but China will continue to dominate
Battery storage pipeline continues to expand, but financing, technology access, and project execution remain key challenges
India’s expanding solar PV manufacturing industry could play a growing role in diversifying global supply chains, as the country strengthens its position as a major manufacturing hub, according to the International Energy Agency (IEA).
In its India Renewable Energy Market Report 2026, the IEA identifies India as the world’s second-largest manufacturer of solar PV modules after China, with annual module manufacturing capacity reaching around 225 GW in September 2026, up from around 22 GW in 2022. It expects the country to maintain this position through 2030 as manufacturing capacity continues to expand, reaching around 250 GW by the end of this decade.
The report notes that India’s growing clean energy manufacturing base is helping diversify international supply chains. This comes as global solar manufacturing remains concentrated in China, particularly in upstream segments of the PV value chain.
The IEA credits India’s industrial policies, including the Production Linked Incentive (PLI) scheme and domestic sourcing requirements, with helping mobilize investment in solar PV manufacturing. New policy measures are also targeting strategic upstream segments, where global dependence on imports from China exceeds 95%, the IEA said.
The report focuses on India’s growing importance in the global renewable energy markets, which reduces its reliance on imported fuels. According to the report’s estimates, India’s coal imports in 2025 would have been around 110 million tons higher without the solar PV, wind, and bioenergy capacity added since 2010. Import dependence for electricity generation would also have exceeded 30%, approximately twice the actual level.
By 2030, the country is forecast to reach around 530 GW of renewable power capacity, with solar PV accounting for more than 80% of new additions. This also opens up new opportunities in the manufacturing space.
The IEA estimates that the country accounted for 40% of global solar module manufacturing capacity outside China and 20% of non-China cell manufacturing capacity in 2025. By 2030, these shares are expected to increase to around 50% and 30%, respectively.
The country’s installed solar PV capacity is likely to exceed 450 GW DC/350 GW AC. Analysts project that by 2030, India could have about 135 GW of surplus solar module manufacturing capacity available for export, making it the world’s second-largest potential exporter after China.
This expansion could create opportunities to serve markets seeking alternatives to Chinese solar PV products, particularly as the European Union and other regions pursue supply chain diversification policies.
China will nevertheless continue to dominate the market with almost 600 GW of spare capacity by the IEA’s estimates. Indian manufacturers will face intense competition in international markets as the report estimates about 780 GW of global module manufacturing capacity will be available for export, against an estimated global import demand of around 130 GW to 160 GW.
Globally, solar PV manufacturing capacity across the supply chain exceeded 1,200 GW in 2025, compared with approximately 630 GW DC of annual installations. China accounted for around 75% of global module manufacturing capacity, 90% of cell capacity, and 95% of wafer and polysilicon capacity.
The IEA expects intense competition in international markets to continue, with Chinese manufacturers retaining a cost advantage. Access to export markets will increasingly depend on cost competitiveness, trade policies, local-content requirements, and supply chain security regulations.
Even as China accounts for the lion’s share of global solar PV manufacturing at lower costs, the IEA estimates India’s integrated solar PV manufacturing costs to reach around $0.15/W, supported by lower labor and energy costs and economies of scale. This would be approximately 10% higher than production costs in China but lower than those in the EU and US without subsidies. However, costs remain around 70% above current global spot market prices, posing a challenge for Indian manufacturers amid global oversupply and intense price competition.
However, the IEA cautions that India’s manufacturing expansion has not been uniform across the PV value chain. While module production capacity has increased rapidly, upstream manufacturing remains underdeveloped.
India’s solar cell imports reached around $2.5 billion in 2025, with approximately 70% sourced from China. Wafer manufacturing was also in its early stages, with the country commissioning its first facility, with around 2 GW of annual capacity, in 2025. India had no operational polysilicon production facility as of 2025.
The IEA expects India’s cell manufacturing capacity to exceed 60 GW by 2030, while wafer capacity could reach around 50 GW based on announced projects. Polysilicon production could also develop sufficiently to support approximately 20 GW of integrated module production annually by the end of the decade.
It identifies technology access, financing requirements, process know-how, scale-up risks and competition from lower-cost imports as challenges to expanding upstream manufacturing. India also remains dependent on imported manufacturing equipment, process technologies and technical expertise, particularly from China.
The IEA also highlights the growing importance of battery energy storage systems (BESS) in supporting India’s renewable energy expansion. As solar and wind capacity increases, storage will be increasingly important for managing variable generation, improving grid flexibility and ensuring a reliable electricity supply.
Battery energy storage deployment in the country is also expected to accelerate, especially during the second half of this decade. According to the IEA, at the beginning of 2026, India’s installed utility-scale battery storage capacity stood at just 350 MW, of which 280 MW was commissioned in 2025.
In 2026, more than 1 GW of additional capacity is expected to come online, with annual installations projected to reach 6 GW to 8 GW by 2030 in line with the growing share of renewable energy. India’s National Electricity Plan sees battery storage capacity rising to nearly 9 GW by 2026-27, and almost 50 GW by 2031-32.
By January 2026, India’s battery storage project pipeline reached around 111 GWh, equivalent to approximately 35 GW of capacity. However, converting announced and tendered projects into operational capacity remains a challenge, the analysts caution, citing financing, grid connectivity, equipment procurement, and project execution as key bottlenecks.
“Improved auction and contract design, accelerated permitting and faster grid connection are critical to converting India’s battery storage pipeline into operating capacity,” recommend the analysts.
The complete IEA report is available on its website for free download.
To discuss India’s upstream solar PV manufacturing challenges and opportunities, TaiyangNews will host the third edition of its Solar Technology Conference.India 2027 on January 20-21 in New Delhi. Registrations will open soon.