India is preparing a new Production Linked Incentive (PLI) scheme to encourage domestic manufacturing of polysilicon, a key material used to make solar panels.

The proposed scheme could cover more than 10 GW of production capacity and is aimed at reducing India’s heavy dependence on China for critical solar components.

Polysilicon sits at the beginning of the solar manufacturing chain. It is processed into wafers and cells, which eventually become solar modules. While India has rapidly expanded its solar panel manufacturing capacity, it continues to rely heavily on imports for several upstream materials.

The government’s latest move is therefore focused on strengthening this missing link. According to the Ministry of New and Renewable Energy, the proposed incentive programme will encourage companies to invest in polysilicon manufacturing by offering financial support linked to production.

The move comes as India is pushing to build a more self-reliant renewable energy industry. China currently dominates the global polysilicon supply chain, leaving Indian manufacturers exposed to international prices, supply disruptions and changes in trade policies.

India has already introduced incentives for solar module manufacturing. Under the existing high-efficiency solar PV module PLI scheme, the government has awarded capacity for 48.3 GW of fully or partially integrated manufacturing. However, the country still faces gaps in upstream production.

The need to close these gaps has become more urgent as India’s solar installations continue to grow. Recent industry reports have highlighted shortages of domestically produced solar cells and the resulting pressure on manufacturers.

The proposed polysilicon PLI scheme could help India develop a more complete solar supply chain, reduce import risks and support its long-term renewable energy ambitions. It could also encourage fresh investment in domestic manufacturing and create opportunities across the broader clean energy industry.

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