India's Solar Manufacturing Renaissance: What PM Surya Ghar and PM Kusum Mean for Domestic Cell and Module Producers
India is experiencing a solar manufacturing renaissance. The combination of policy support — through the PLI scheme, ALMM framework, Basic Customs Duty (BCD) on imported modules, and the Domestic Content Requirement — alongside a demand surge from flagship schemes like PM Surya Ghar Muft Bijli Yojana and PM Kusum Yojana has created conditions for India’s solar cell and module manufacturing sector to scale at unprecedented speed.
For solar distributors and installers, this is not just background industry news. The expansion of domestic manufacturing directly affects supply availability, pricing, quality standards, and the long-term reliability of the modules they install. Understanding this transformation is essential for strategic sourcing and business planning.
The Policy Architecture Driving Manufacturing Growth
Basic Customs Duty (BCD) on Imported Modules
Since April 2022, India has imposed a 40% Basic Customs Duty on imported solar modules and 25% on imported solar cells. This tariff barrier has made imported Chinese modules uncompetitive for most Indian applications — particularly government-funded schemes — and created strong demand pull for domestically manufactured modules.
The PLI Scheme for Solar PV Manufacturing
The Production Linked Incentive scheme for high-efficiency solar PV modules provides manufacturers with financial incentives tied to production volume and efficiency thresholds. PLI has catalysed over ₹90,000 crore in committed investments in solar manufacturing — spanning polysilicon, ingots, wafers, cells, and modules — with the aim of creating a fully integrated domestic solar supply chain.
ALMM and DCR as Demand Guarantees
The ALMM framework ensures that government-funded installations use only certified domestic modules. Combined with DCR requirements in tenders under PM Kusum and certain PM Surya Ghar provisions, these policies create a guaranteed demand floor for ALMM-listed Indian manufacturers — giving manufacturers the demand certainty needed to invest in capacity expansion and quality upgrades.
Capacity Expansion: The Numbers
India’s solar module manufacturing capacity has grown from approximately 15 GW in 2021 to an estimated 60+ GW by end-2025, with cell manufacturing capacity also expanding rapidly. For context on where this trajectory is headed, read our analysis of the future of solar manufacturing in India, covering technology, policy, and growth trends.
Technology Upgradation Driven by Scheme Requirements
PM Surya Ghar’s efficiency requirements and PM Kusum’s performance demands are pushing domestic manufacturers to upgrade from older PERC technologies to higher-efficiency configurations. The shift from M6 to M10 wafer formats, the adoption of half-cut cell architectures, and the introduction of bifacial modules have all been accelerated by the quality bar set by government scheme specifications.
This technology evolution is covered in detail in our guide on why India’s solar module manufacturing sector is gaining global attention.
What This Means for Distributors and Installers
The expansion of India’s domestic solar manufacturing base has several direct implications for the supply chain:
Better availability: Growing domestic capacity reduces supply shortages and lead time delays that plagued the market in 2021–2023 when import disruptions exposed the risks of over-reliance on Chinese modules.
More competitive pricing: As domestic manufacturers scale production, per-unit manufacturing costs fall — improving module pricing for distributors without sacrificing margin.
Higher quality at accessible prices: PLI incentives tied to efficiency thresholds push manufacturers to produce higher-grade cells and modules, benefiting the entire supply chain.
Easier compliance: Sourcing from domestic ALMM-listed manufacturers simplifies the compliance documentation process for both PM Surya Ghar and PM Kusum installations.
Websol Energy System’s Place in This Transformation
Established in 1994, Websol Energy System is among the oldest and most experienced solar cell manufacturers in India. Operating its manufacturing facility in Falta, West Bengal, Websol has been part of India’s solar manufacturing story since its very beginning. Today, Websol manufactures M10 Bifacial Mono-PERC solar cells as a certified solar cell manufacturer in India and produces finished modules as a solar module manufacturer in India — serving the domestic government scheme supply chain and export markets with consistent quality.
Frequently Asked Questions
Q1: What is the current solar module manufacturing capacity of India?
As of 2026, India’s solar module manufacturing capacity exceeds 60 GW per annum — a dramatic increase from approximately 15 GW in 2021. Cell manufacturing capacity is also growing rapidly, driven by PLI scheme investments.
Q2: How does the PLI scheme benefit solar panel distributors and installers?
The PLI scheme incentivises domestic manufacturers to produce higher efficiency modules at scale, improving both module quality and supply availability. For distributors and installers, this translates into more ALMM-listed module options, better pricing over time, and reduced supply chain risk.
Q3: Why is BCD on imported solar modules important for Indian installers?
The 40% Basic Customs Duty on imported solar modules ensures that domestic manufacturers can compete on price, supporting the survival and growth of India’s solar manufacturing ecosystem. For PM Kusum and PM Surya Ghar installers with DCR requirements, BCD also reinforces the necessity of sourcing domestically.
Q4: Will domestic solar module prices decrease as manufacturing scales?
Yes, broadly. As domestic manufacturers achieve higher production volumes, per-unit manufacturing costs decrease — historical trends from China’s manufacturing scale-up confirm this pattern. Indian module prices are expected to continue declining progressively as capacity expands.
Q5: How does India's growing solar manufacturing sector benefit PM Surya Ghar programme delivery?
Growing domestic manufacturing capacity ensures supply availability for the massive volume of installations targeted under PM Surya Ghar — 1 crore households. It also reduces dependence on imports that could be disrupted by geopolitical factors, pricing volatility, or supply chain disruptions.
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