India is launching a new production-linked incentive scheme targeting more than 10 GW of domestic polysilicon capacity to break its 100% reliance on Chinese imports. The move extends ₹240 billion ($2.52 billion) in existing solar manufacturing incentives upstream, complementing over 200 GW of module capacity and a June 2028 target of 80 GW for ingots and wafers. With polysilicon also vital for semiconductors, the policy supports dual industrial goals. However, capital intensity and Chinese scale dominance pose major competitiveness hurdles.
According to www.tekedia.com, India is preparing a new production-linked incentive scheme to boost domestic polysilicon manufacturing — a strategic move aimed at reducing near-total reliance on Chinese imports and building an end-to-end solar supply chain.
Policy expansion upstream
The initiative extends India’s existing manufacturing incentive framework beyond solar modules and cells into the critical upstream segment of polysilicon — the foundational raw material for photovoltaic wafers and cells. Santosh Kumar Sarangi, secretary at India’s Ministry of New and Renewable Energy, confirmed on August 7, 2026 that the proposed programme could support more than 10 gigawatts of polysilicon production capacity. While the financial scale of the incentives remains undisclosed, the policy marks a deliberate shift toward vertical integration in clean-energy manufacturing.
India currently imports 100% of its polysilicon from China — a dependency that exposes its rapidly scaling solar industry to supply volatility, pricing shocks, and geopolitical risk. The government has already committed ₹240 billion ($2.52 billion) in manufacturing-linked incentives for solar modules and cells alone, underscoring the fiscal weight behind its industrial ambitions.
Current manufacturing footprint and near-term targets
India’s solar manufacturing base is expanding at pace: according to Sarangi, the country hosts over 200 GW of solar module manufacturing capacity and more than 32 GW of solar cell capacity. An additional 100 GW of cell manufacturing capacity is expected to come online within approximately one year. New Delhi also aims to achieve at least 80 GW of domestic solar ingot and wafer manufacturing capacity by June 2028.
This buildout aligns with India’s national renewable energy target of 500 GW of non-fossil-fuel power capacity by 2030. Achieving that goal requires not only accelerated installation but also secure access to equipment and raw materials — making polysilicon self-reliance a functional prerequisite, not merely an industrial aspiration.
Strategic implications beyond solar
The polysilicon push carries cross-sectoral significance. As Sarangi noted at a Confederation of Indian Industry event in New Delhi, polysilicon is also a key input for semiconductor manufacturing. Domestic production capacity could therefore serve dual purposes — strengthening both India’s clean-energy infrastructure and its nascent semiconductor ecosystem.
“The policy would help reduce import dependence while strengthening India’s industrial capabilities as renewable energy deployment accelerates.” — Santosh Kumar Sarangi, Secretary, Ministry of New and Renewable Energy
This dual-use potential elevates the proposal beyond a sector-specific subsidy into a broader industrial-policy instrument — one that supports India’s parallel efforts to expand renewable power generation, scale domestic manufacturing, and position itself as a credible node in the global advanced-technology supply chain.
Challenges to competitiveness
Polysilicon manufacturing is inherently capital-intensive and technically demanding: it requires massive electricity inputs, ultra-pure environments, specialized furnaces, and highly trained personnel. Unlike downstream segments such as module assembly, upstream polysilicon production benefits strongly from economies of scale — a structural advantage currently held by Chinese manufacturers across virtually every stage of the solar value chain.
The success of India’s incentive scheme will hinge on whether it can attract investment large enough to achieve cost parity — not just replace imports with higher-cost domestic output. Without competitive production economics, local polysilicon may remain commercially unviable despite policy support. This challenge underscores the difficulty of moving upstream in a globally consolidated industry where Chinese firms control over 95% of global polysilicon capacity.
Source: tekedia.com
Compiled from international media by the SCI.AI editorial team.
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