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Solar PV module manufacturing capacity in India likely to increase to over 165 GW by March 2027: ICRA
Nov-06-2025

Credit rating agency ICRA in its latest report has said that the solar photovoltaic (PV) module manufacturing capacity in India is likely to increase to over 165 GW by March 2027 from around 109 GW at present, led by strong policy support in the form of the approved list of models and manufacturers (ALMM), which effectively barred the direct import of modules, along with the imposition of basic customs duty on imported cells & modules, and the production-linked incentive (PLI) scheme. The implementation of ALMM List-II for solar PV cells from June 2026 has spurred the ongoing expansion of cell manufacturing capacity by module original equipment manufacturers (OEMs) in India, which is likely to increase to about 100 GW by December 2027 from 17.9 GW currently under ALMM.

According to the report, the industry is poised to face a potential overcapacity scenario as the annual solar capacity installation is expected at 45-50 gigawatt direct current (GWdc) against an annual solar module production of 60-65 GW. Further, the recent imposition of US tariffs has adversely impacted the export volumes, posing new challenges for the industry as the modules have been redirected from the export market to the domestic market. Hence, the overcapacity in module production is likely to result in a consolidation of the smaller/pureplay module players. However, ICRA anticipates the vertically integrated manufacturers to benefit over the long term due to greater control over the supply chain.

ICRA also noted that all projects wherein the last date of bid submission is prior to September 1, 2025, translating into a solar project pipeline of 45-50 GW, will be exempted from the requirement of using solar PV cells under ALMM List-II even if their date of commissioning is after June 1, 2026. This will support the order book of OEMs without cell manufacturing capacity in the near term. Nevertheless, the bidding activity has slowed down in the last few months, which remains a key monitorable. 

It further said the solar PV manufacturing supply chain is dominated by China, with over 90% share in the global manufacturing capacity across polysilicon and wafer, over 85% share in cells and around 80% share in modules. Given the dependence on China for the sourcing of wafers and ingots, any potential geopolitical restrictions on the supply of technology/machinery in setting up backward integration facilities for domestic OEMs over the medium term remains a key monitorable. Moreover, each successive stage in the value chain demands higher technological complexity, which not only requires substantial capital investment but also heightens the risks associated with project stabilisation and implementation. 


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