Mumbai, Nov 6 India's solar photovoltaic module manufacturing capacity is projected to increase to over 165 GW by March 2027 -- up from approximately 109 GW currently, a report said on Thursday.
The strong government support in the form of the approved list of models and manufacturers (ALMM), basic customs duty on imported cells and modules, and the production-linked incentive scheme drove the growth, the report from ratings agency ICRA said.
The report forecasts annual solar capacity installations at 45–50 gigawatt direct current (GWdc), while annual module production is expected to reach 60–65 GW, and this discrepancy may lead to a supply surplus, potentially prompting consolidation among smaller and pure-play module players.
The ALMM List-II for cells, effective June 2026, has encouraged OEMs to increase cell manufacturing to approximately 100 GW by December 2027, up from the current 17.9 GW listed under ALMM, the report noted.
Further, the recent imposition of US tariffs have redirected the supply from the export market to the domestic market, it noted.
However, the report anticipated that the vertically integrated manufacturers will benefit over the long term due to greater control over the supply chain.
Ankit Jain, Vice President and Co-Group Head-Corporate Ratings, ICRA, said that operating profitability for domestic solar OEMs at 25 per cent in FY25 is likely to moderate due to competitive pressures and overcapacity build-up.
As the ALMM requirement for solar cells is effective from June 2026, a significant scale-up in the cell manufacturing capacity along with its stabilisation in a timely manner remains critical in the near term, he added.
Dependence on China for wafers, ingots poses significant risks for the industry's transition, given China's dominance in global supply and the potential geopolitical restrictions for backward integration, the report noted.
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