The Ministry of Finance and Ministry of New and Renewable Energy (MNRE) are in discussions to bring out a new capital subsidy scheme for the upstream segment of solar photovoltaic (PV) manufacturing, MNRE Secretary Santosh Kumar Sarangi told The Indian Express. The proposed scheme would be separate from the existing Production Linked Incentive (PLI) scheme for high-efficiency solar PV modules.
Sarangi said while solar module and solar cell manufacturing have grown in a desirable manner, upstream segments such as polysilicon refining as well as ingot and wafer manufacturing continue to face challenges. These, he said, stem from factors including high capital intensity and price pressures caused by aggressive pricing from China.
“We are now trying to advocate a slight tweak in the way in which support could be provided to these kinds of industries,” Sarangi said, adding that discussions on the proposal are currently underway with the Ministry of Finance.
The existing PLI scheme for solar PV modules covers both upstream — ingot, wafer and polysilicon — and downstream — solar cell and module manufacturing — segments. However, progress under the PLI scheme has been slower in upstream segments such as polysilicon refining and ingot and wafer production.
“Polysilicon is a highly electricity-intensive industry. The refining from silica to polysilicon is extremely electricity intensive. So, efforts will have to focus on sourcing low-cost electricity,” Sarangi said.
“Since it involves a huge capital expenditure to set up this kind of industry, a capex subsidy would be desirable. In that context, MNRE is now discussing with Ministry of Finance whether it is possible to have a different kind of scheme where capex is given for polysilicon and ingot-wafer projects that were sanctioned under the PLI but could not take off for a variety of reasons,” he added.
The solar PV cell manufacturing capacity in the country is around 27 GW, according to the information provided by Solar PV Manufacturing Associations. The installed ingot and wafer manufacturing capacity in the country is around 2 GW.
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At present there is no commercial production of Polysilicon in the country, the Ministry had informed the Parliament.
“The country’s solar PV module manufacturing capacity is sufficient to cater to domestic demand. However, for upstream stages like solar cells, wafers and polysilicon, domestic manufacturing capacity is not sufficient to meet domestic demand which necessitates imports,” the Ministry told the Parliament in December.
The MNRE further informed that the data from the Department of Commerce’s Export-Import Data Bank shows that imports of solar PV cells, wafers and polysilicon during the FY25 were valued at around $1,641 million, $156 million, and $0.03 million, respectively.
Launched in March 2021, the PLI scheme for solar PV modules aimed to install 65 gigawatts (GW) per annum of fully and partially integrated solar PV module manufacturing capacity.
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The scheme was initially backed by an outlay of Rs 4,500 crore. In 2022, an additional budget allocation of Rs 19,500 crore was approved, bringing the total sanctioned outlay to Rs 24,000 crore across two tranches.
According to MNRE, the installed solar PV module manufacturing capacity in the country, as per the Approved List of Models and Manufacturers (ALMM), is 121.7 GW, which includes 26.6 GW capacity under the PLI Scheme for high efficiency Solar PV Modules.
A joint report by Institute for Energy Economics and Financial Analysis (IEEFA) and JMK Research shows that operationalisation of PLI-awarded facilities has revealed significant implementation and execution gaps. While downstream segments such as module assembly have seen progress, upstream segments like wafer and polysilicon manufacturing have lagged behind.
The report, which was released in December 2025, also says that about 36% of India’s total cell capacity and 24% of module capacity originate from PLI allocations.
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According to the report, as of June 2025 the overall operational capacity achieved under the solar PLI scheme was approximately 29% of the total awarded capacity.
Module assembly exhibited the highest capacity-achievement rate at 59%, reflecting stronger progress in downstream manufacturing.
In contrast, the achievement rates for cell manufacturing (22%), wafer-ingot manufacturing (10%) and polysilicon manufacturing (14%) were significantly lower, indicating persistent barriers to upstream capacity realisation.
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