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Centre Considers Rs 5,000–6,000 Crore Incentive to Boost Domestic Solar Ingot and Wafer Manufacturing

The Union government is evaluating a proposal to extend Rs 5,000–6,000 crore in incentive support to promote domestic manufacturing of solar ingots and wafers, as part of efforts to strengthen India’s upstream solar supply chain ahead of the Union Budget 2026–27, according to officials familiar with the discussions.

The proposed allocation is being examined under a potential incentive- or PLI-linked framework aimed at reducing India’s dependence on imports for critical solar components and improving supply chain resilience in the renewable energy sector. Officials noted that deliberations are still underway and no final decision has been taken.

According to sources, the focus of the proposed support would be on upstream manufacturing, encouraging fresh investments in ingot and wafer production—key inputs for solar cell manufacturing. Despite rapid growth in solar deployment and downstream manufacturing, India continues to rely heavily on imports for these segments.

Data from the Ministry of New and Renewable Energy (MNRE) highlights the scale of India’s solar manufacturing expansion over the past decade. Solar cell manufacturing capacity increased from 1.2 GW in 2014 to 27 GW in 2025, while solar module capacity rose from 2.3 GW to 144 GW during the same period. In 2025 alone, the country added 81 GW of new module manufacturing capacity.

Officials attributed much of this growth to policy interventions such as the Approved List of Models and Manufacturers (ALMM), which mandates the use of domestically manufactured solar modules in government-backed projects. While ALMM has significantly boosted cell and module production, it does not directly incentivise upstream segments like ingots and wafers.

In parallel, the government’s Production Linked Incentive (PLI) scheme for high-efficiency solar PV modules has driven investment across the cell and module value chain. However, large-scale incentive support for ingot and wafer manufacturing has so far remained limited, prompting the current review.