India’s rapid expansion in solar manufacturing has tipped from boom to oversupply, with capacity far exceeding both domestic demand and export opportunities. Capacity utilisation at module assembly plants has fallen to about 40%, down from over 70% before 2023, according to RenewSys India Pvt. Ltd. Managing Director Avinash Hiranandani described the situation as a “structural glut” rather than a temporary slowdown.
Policy support since 2020—import duties, local sourcing mandates, and approved manufacturer lists—spurred significant investment. While this reduced reliance on imports, it also led to aggressive capacity additions. Cell manufacturing capacity alone could rise fourfold to 100 GW over the next two years, estimates ICRA Ltd., raising concerns of another oversupply wave.
In 2025, India added a record 38 GW of solar capacity, but this is still less than the 154 GW of manufacturing capacity that is anticipated by the end of the year. Due to US tariffs and trade uncertainties, exports have also declined. The Alliance for American Solar Manufacturing and Trade is calling for high anti-dumping taxes on Indian modules.
While cautioning that smaller and less sophisticated businesses may find it difficult to continue as technology advances, experts advise focusing on new international markets, maybe supported by funding from the Export-Import Bank of India.
Source – The Economic Times
