ICRA expects the solar photovoltaic (PV) module manufacturing capacity in India to increase to over 165 GW by March 2027 from ~109 GW at present, led by strong policy support in the form of the Approved List of Models and Manufacturers (ALMM), which effectively barred the direct import of modules, along with the imposition of basic customs duty on imported cells & modules, and the Production-Linked Incentive (PLI) scheme. The implementation of ALMM List-II for solar PV cells from June 2026 has spurred the ongoing expansion of cell manufacturing capacity by module Original Equipment Manufacturers (OEMs) in India, which is likely to increase to about 100 GW by December 2027 from 17.9 GW currently under ALMM.
The industry is poised to face a potential overcapacity scenario as the annual solar capacity installation is expected at 45-50 Giga Watt direct current (GWdc) against an annual solar module production of 60-65 GW. Further, the recent imposition of US tariffs has adversely impacted the export volumes, posing new challenges for the industry as the modules have been redirected from the export market to the domestic market. Hence, the overcapacity in module production is likely to result in a consolidation of the smaller/pureplay module players. However, ICRA anticipates the vertically integrated manufacturers to benefit over the long term due to greater control over the supply chain.
