India’s Solar Manufacturing Push Strengthens Domestic Industry Against Trade Pressures

India’s solar manufacturing sector has expanded rapidly, with around $16 billion invested over the past 18 months, while the country’s large domestic market could help absorb additional production amid potential trade restrictions in the United States, according to a new report.

The Clean Investment Monitor report by the Rhodium Group, a US-based market research and analytics firm specialising in renewable energy, said investment in India’s solar manufacturing sector increased from around $85 million in 2018 to $12 billion in 2025.

A further $4 billion was committed during the first half of 2026, taking investment commitments over the past 18 months to around $16 billion.

The expansion has also significantly increased India’s solar manufacturing capacity. Module manufacturing capacity has risen from around 2.5 GW in 2014 to 242.7 GW, according to the report.

India had no domestic solar cell manufacturing capacity in 2014. It now has around 40.5 GW of cell capacity and 2.5 GW of wafer capacity, although the report highlighted a significant gap between module and cell manufacturing capacity.

The mismatch could narrow as an additional 40 GW of cell capacity and 24 GW of wafer capacity are expected to be added, the report said.

The growth in domestic manufacturing has been supported by government policies requiring the use of locally manufactured solar modules and cells through the Approved List of Models and Manufacturers (ALMM).

Efforts are also underway to extend the ALMM framework to solar wafers. The policy has been expanded to cover nearly all solar projects in India, with limited exemptions, including certain net-metering and open-access projects that have been given a commissioning window until December 31.

However, the report noted that Indian solar manufacturers could face fresh challenges in the US market, which is an important export destination for some domestic producers.

The United States could impose anti-dumping and countervailing duties on Indian solar products, creating a potential headwind for exporters. The US International Trade Commission is yet to determine whether imports have caused material injury to the domestic industry, a decision that would be relevant to the imposition of such duties.

India exported solar modules and cells worth around $1.2 billion to the US in 2025. These exports accounted for approximately 13 per cent of the value of modules and cells produced in India, according to the report.

Despite the potential impact of US trade measures, the report said India’s large and expanding domestic solar market could absorb additional manufacturing capacity.

This could help domestic manufacturers manage the additional supply, although increased competition could put pressure on profit margins, the report said.

The findings highlight the rapid expansion of India’s solar manufacturing base and the growing role of domestic demand in supporting the sector as global trade conditions evolve.