Executive Summary:
In response to a parliamentary question, the Ministry of New and Renewable Energy (MNRE) outlined measures to support domestic solar cell manufacturing, driven by the clean energy mandate requiring locally-produced cells starting June 2026. Key initiatives include the Production Linked Incentive (PLI) Scheme for High Efficiency Solar PV Modules and the Domestic Content Requirement (DCR) under various MNRE schemes. These efforts aim to reduce import reliance and boost domestic production capacity.
Key Points / Main Content:
Domestic Manufacturing Capacity:
* India's current installed solar cell manufacturing capacity is 26.35 GW, according to the All India Solar Industries Association (AISIA).
Production Linked Incentive (PLI) Scheme:
* The PLI Scheme for High Efficiency Solar PV Modules aims to promote domestic manufacturing and reduce import dependency.
* Letters of Award have been issued for setting up 48,337 MW of solar PV module manufacturing units under the PLI scheme.
* Manufacturing units are eligible for PLI on annual sales of high-efficiency modules for 5 years from the earlier of the commissioning or scheduled commissioning date, contingent upon meeting scheme guidelines.
Domestic Content Requirement (DCR):
* The MNRE mandates the use of domestically sourced solar PV cells and modules in schemes like CPSU Scheme Phase-II, PM-KUSUM (Components B & C), and PM Surya Ghar: Muft Bijli Yojana, where government subsidies are involved.
Customs Duty Measures:
* Basic Customs Duty (BCD) is imposed on the import of solar PV cells and modules.
* Customs duty is exempt on capital goods imports for manufacturing solar cells and modules, as specified in Notification No. 30/2024-Customs.
Impact Analysis:
Domestic Solar PV Module Manufacturers:
* Impact: Benefit from increased demand due to DCR, financial incentives through the PLI scheme, and protection from import competition via BCD.
* Action Required: Establish or expand manufacturing facilities, ensure compliance with PLI scheme guidelines, and capitalize on government incentives.
Solar Power Project Developers:
* Impact: Required to use domestically produced solar cells and modules for projects receiving government subsidies, potentially affecting project costs and supply chains.
* Action Required: Adapt procurement strategies to comply with DCR requirements and source solar PV cells and modules from domestic manufacturers starting June 2026.
Importers of Solar PV Cells and Modules:
* Impact: Face increased costs due to BCD, potentially reducing import volumes.
* Action Required: Re-evaluate sourcing strategies and consider establishing domestic manufacturing facilities to benefit from PLI incentives.
Government of India (MNRE):
* Impact: Responsible for implementing and monitoring the PLI scheme, DCR, and customs duty measures to achieve domestic manufacturing goals.
* Action Required: Ensure effective implementation of policies, monitor progress towards capacity enhancement, and address any challenges faced by domestic manufacturers.
Key Entities Referenced
Ministry of New and Renewable Energy MNRE: The Indian government ministry responsible for new and renewable energy.
Production Linked Incentive PLI scheme for solar PV Module: A Government of India scheme to promote domestic manufacturing of solar photovoltaic modules.
All India Solar Industries Association AISIA: An association of solar industries in India.
Domestic Content Requirement DCR: A requirement under certain MNRE schemes to source solar PV cells and modules from domestic sources.
Basic Customs Duty BCD: A duty imposed by the Government of India on the import of solar PV cells and modules.
PM Surya Ghar: Muft Bijli Yojana: A government scheme providing subsidies and mandating domestic sourcing of solar PV cells and modules
CPSU Scheme PhaseII: A scheme of the MNRE wherein government subsidy is given, it has been mandated to source solar PV cells and modules from domestic sources.
PMKUSUM Components B C: A scheme of the MNRE wherein government subsidy is given, it has been mandated to source solar PV cells and modules from domestic sources.
GOVERNMENT OF INDIA
MINISTRY OF NEW AND RENEWABLE ENERGY
LOK SABHA
UNSTARRED QUESTION NO. 1706
ANSWERED ON 30/07/2025
SCHEME TO BOOST DOMESTIC MANUFACTURING OF SOLAR CELLS
1706. SHRI TANUJ PUNIA
Will the Minister of NEW AND RENEWABLE ENERGY be pleased to state:
(a) the measures taken by the Government to support domestic manufacturers in scaling up
production to meet the anticipated demand in light of the mandate requiring clean energy projects
to use locally-produced solar cells starting June 2026; and
(b) the manner in which the Government proposed to ensure that Production Linked Incentive
(PLI) scheme for solar PV Module leads to a reduction in the cost of solar power projects and
decreases reliance on imports considering the scheme to boost domestic manufacturing of
solarphotovoltaic (PV) modules?
ANSWER
THE MINISTER OF STATE FOR NEW & RENEWABLE ENERGY AND POWER
(SHRI SHRIPAD YESSO NAIK)
(a) As per the information received from All India Solar Industries Association (AISIA), the
current installed solar cell manufacturing capacity in India is 26.35 GW. The Ministry of New
and Renewable Energy (MNRE), Government of India, has been consistently bringing out
policies to further boost domestic manufacturing capacity of solar cells. Various initiatives taken,
inter-alia, include those mentioned at Annexure-I.
(b) The Production Linked Incentive (PLI) Scheme for High Efficiency Solar PV Modules is
aimed at promoting manufacturing of high efficiency solar PV modules in India and thus
reducing import dependency for solar energy sector. Under PLI Scheme for High Efficiency
Solar PV Modules, Letters of Award have been issued for setting up of 48,337 MW of fully/
partially integrated solar PV module manufacturing units. The manufacturing units sanctioned
under PLI scheme for High Efficiency Solar PV modules are eligible for getting PLI on annual
basis on manufacture and sale of High Efficiency Solar PV modules for 5 years from the actual
date of commissioning or scheduled commissioning date, whichever is earlier, subject to
fulfillment of conditions specified in scheme guidelines/tender documents. While the scheme
may influence long-term module affordability, the prices of solar panels/modules are decided by
the concerned solar PV module manufacturing companies who compete with each other in the
market.
*****Annexure-I
Annexure referred to in reply of part (a) of the Lok Sabha Unstarred Question No. 1706 for
30.07.2025 regarding ‘Scheme to Boost Domestic Manufacturing of Solar Cells’
Initiatives taken to increase domestic manufacturing capacity of solar cells, inter-alia, include:
(i) Production Linked Incentive (PLI) Scheme: The Government of India is implementing the
Production Linked Incentive (PLI) Scheme for High Efficiency Solar PV Modules, for achieving
domestic manufacturing capacity of Giga Watt (GW) scale in High Efficiency Solar PV modules,
with an outlay of Rs. 24,000 crore. Under the Scheme, Letters of Award have been issued for setting
up of 48,337 MW of fully/ partially integrated solar PV module manufacturing units, which includes
manufacturing of solar cells as well.
(ii) Domestic Content Requirement (DCR): Under some of the current schemes of the MNRE,
namely CPSU Scheme Phase-II, PM-KUSUM Components B & C, and PM Surya Ghar: Muft Bijli
Yojana, wherein government subsidy is given, it has been mandated to source solar PV cells and
modules from domestic sources.
(iii) Imposition of Basic Customs Duty on import of solar PV cells and modules: The
Government has imposed Basic Customs Duty (BCD) on import of solar PV cells, and modules.
(iv) Exemption of Custom Duty on capital goods for manufacture of Solar Cells and Modules:
The Government has exempted customs duty on import of the goods specified in List 41 of the
notification No. 30/2024-Customs dated 23.07.2024, for the manufacturer of solar PV cells and
modules.