The Geopolitics of Solar Manufacturing and how can India Build a China-Alternative Supply Chain?

July 17, 2026. By News Bureau

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articles

Tanmoy Duari

AXITEC Energy India Pvt. Ltd.

Solar manufacturing

China-Alternative Supply Chain

Clean energy transition

Photovoltaic (PV) technologies

Chinese manufacturing ecosystems

Covid-19 pandemic

TOPCon technology

Heterojunction (HJT) technologies

The global clean energy transition is often discussed in terms of climate targets, renewable energy capacity additions, and carbon neutrality commitments. Yet, behind every solar panel installed across the world lies an increasingly complex geopolitical story. Solar manufacturing has evolved far beyond being an industrial activity, it has become a strategic asset, influencing national security, trade policies, economic competitiveness, and technological leadership.

For nearly two decades, China has methodically built an unparalleled position across the solar manufacturing value chain, transforming itself into the world’s undisputed manufacturing hub for photovoltaic (PV) technologies. Today, more than 80 percent of the world’s solar modules and over 95 percent of solar wafers originate from Chinese manufacturing ecosystems. Such concentration has prompted governments across the United States, Europe, Japan, and India to rethink supply-chain resilience, much like they did for semiconductors.

Against this backdrop, India finds itself at a defining moment. With one of the world’s fastest-growing renewable energy markets, supportive industrial policies, and rapidly expanding domestic manufacturing capacity, the country has the opportunity to emerge as a credible alternative in the global solar supply chain. However, achieving that ambition requires moving beyond module assembly to mastering the upstream segments that currently remain China’s strongest fortress.

Solar Manufacturing has Become a Strategic Industry

The geopolitical significance of solar manufacturing has grown considerably over the past five years. The COVID-19 pandemic exposed the risks associated with highly concentrated global supply chains. Subsequent geopolitical developments including the US-China strategic rivalry, trade restrictions, disruptions in maritime logistics, and increasing concerns around economic security that have reinforced the importance of manufacturing diversification.

Energy security today extends well beyond securing fuel supplies. It increasingly encompasses securing access to clean energy technologies themselves.

Countries that rely heavily on imported solar components risk exposure to pricing volatility, trade disruptions, export controls, and geopolitical uncertainties. Consequently, governments are increasingly viewing domestic solar manufacturing as a strategic capability rather than merely an industrial investment.

This shift explains why major economies are deploying unprecedented policy support through industrial incentives, local-content requirements, manufacturing subsidies, and strategic procurement frameworks.

China’s Dominance was Built Over Two Decades

China’s leadership did not emerge overnight. Over the past twenty years, the country has systematically invested across every stage of the photovoltaic manufacturing ecosystem from polysilicon refining and ingot production to wafer manufacturing, solar cells, modules, glass, backsheets, EVA films, and manufacturing equipment.

The result is an ecosystem that enjoys unparalleled economies of scale. According to industry estimates available until June 2026, China accounts for over 80 percent of global manufacturing capacity across the solar value chain while controlling more than 95 percent of global wafer production. Equally significant is its dominance in polysilicon production, where Chinese manufacturers continue to dictate global supply and pricing.

This vertical integration enables Chinese manufacturers to optimise costs, improve production efficiencies, shorten supply chains, and respond rapidly to technological transitions such as TOPCon and Heterojunction (HJT) technologies.

For competing nations, replicating such an ecosystem represents a far greater challenge than simply establishing module assembly plants.

India has made Remarkable Progress

India’s manufacturing landscape has transformed significantly since 2020. Just five years ago, domestic manufacturing capacity was largely limited to module assembly, with extensive dependence on imported solar cells and wafers. Today, the picture looks substantially different.

Driven by the Production Linked Incentive (PLI) Scheme, Basic Customs Duty (BCD), the Approved List of Models and Manufacturers (ALMM), and strong domestic demand, India’s manufacturing ecosystem has expanded at an unprecedented pace.

By June 2026, India’s module manufacturing capacity has crossed 200 GW annually. ALMM-approved manufacturing capacity exceeds 190 GW. Domestic solar cell manufacturing capacity has crossed 30 GW. Several integrated manufacturing facilities are under construction with investments running into billions of dollars.

Leading Indian manufacturers have announced ambitious expansion plans aimed not only at serving domestic demand but also global export markets. This rapid capacity creation has transformed India into one of the fastest-growing solar manufacturing destinations worldwide.

The Missing Piece Lies Upstream

Despite impressive achievements, India’s manufacturing story remains incomplete. The country’s greatest vulnerability lies in upstream manufacturing.

Today, nearly all of India’s polysilicon requirements continue to be imported. Wafer imports also remain overwhelmingly dependent on China despite growing domestic module production.

This creates a structural imbalance. While Indian manufacturers increasingly produce modules domestically, the critical raw materials and intermediate products that determine manufacturing competitiveness continue to originate from overseas.

The wafer segment deserves particular attention. Solar wafers serve as the foundation upon which solar cells are manufactured. Without meaningful domestic wafer production, countries remain dependent on external suppliers regardless of how many modules they assemble locally.

Recognising this challenge, the Ministry of New and Renewable Energy (MNRE) expanded the Approved List of Models and Manufacturers (ALMM) framework in March 2026 to include solar ingots and wafers. The new framework, scheduled to become operational from June 2028, reflects a strategic policy shift towards encouraging upstream manufacturing and reducing import dependence.

The Global Market is Creating an Opportunity for India

Ironically, China’s extraordinary manufacturing success has also created opportunities for competitors.

Massive capacity expansion within China has resulted in significant oversupply across multiple segments of the solar value chain. Intense price competition has placed financial pressure on manufacturers worldwide.

Simultaneously, governments across advanced economies are actively seeking supply-chain diversification. The United States has strengthened domestic manufacturing incentives under the Inflation Reduction Act while implementing multiple trade measures aimed at reducing dependence on Chinese imports.

Europe is similarly exploring strategies to improve manufacturing resilience and avoid excessive concentration of critical clean-energy technologies.For global developers and utilities, supplier diversification has become an increasingly important procurement criterion.

India stands to benefit from these structural shifts. Unlike several emerging manufacturing destinations, India combines a rapidly expanding domestic market with policy support, skilled engineering talent, improving infrastructure, and a mature renewable energy ecosystem. These advantages make it one of the few countries capable of supporting large-scale integrated solar manufacturing.

Building a China-Alternative Supply Chain Requires more than Capacity

Capacity expansion alone will not establish India as a global manufacturing alternative. The next phase requires deeper structural transformation. First, India must significantly expand wafer and ingot manufacturing. These segments remain the weakest links in the domestic value chain while representing the greatest strategic opportunity.

Second, the country needs to accelerate investments in polysilicon production. Although capital-intensive and energy-intensive, domestic polysilicon manufacturing would substantially strengthen supply-chain resilience.

Third, manufacturing competitiveness must increasingly be driven by technology rather than protection. The global industry is rapidly transitioning toward high-efficiency technologies such as TOPCon, HJT, Back Contact (BC), and tandem cells. Indian manufacturers must remain aligned with these technological shifts to remain globally competitive over the long term.

Fourth, integrated manufacturing clusters should become the cornerstone of industrial policy. China’s competitiveness stems not only from production capacity but from tightly integrated ecosystems where raw material suppliers, equipment manufacturers, logistics providers, testing facilities, component manufacturers, and exporters operate within close proximity.

Developing similar manufacturing clusters in India would improve operational efficiencies, reduce logistics costs, and strengthen global competitiveness. Finally, international collaboration will remain essential.

India’s ambition should not be complete self-sufficiency but resilient diversification. Strategic partnerships with Europe, Japan, South Korea, the United States, and technology providers can accelerate technology transfer, research collaboration, and advanced manufacturing capabilities.

Can India Truly Become a China Alternative?

Replacing China entirely is neither realistic nor necessary. China’s manufacturing ecosystem represents nearly two decades of sustained investment, technological advancement, industrial integration, and economies of scale.

However, global supply chains no longer require a single dominant manufacturing centre. What the world increasingly seeks is diversification. If India succeeds in building competitive capabilities across polysilicon, ingots, wafers, cells, and modules while maintaining cost competitiveness and technological excellence, it can emerge as the world’s most significant alternative manufacturing hub outside China.

That outcome would not merely strengthen India’s renewable energy ambitions; it would reshape global clean-energy supply chains. The geopolitics of solar manufacturing is redefining the global energy transition. Solar panels are no longer viewed simply as clean energy products, they are instruments of industrial policy, economic resilience, and strategic influence. As nations seek to reduce dependence on concentrated supply chains, the ability to manufacture critical clean-energy technologies domestically has become a cornerstone of national competitiveness.

India has already demonstrated that well-designed policies can rapidly expand module and cell manufacturing. The next challenge is considerably more ambitious: building a fully integrated solar manufacturing ecosystem that extends from polysilicon to finished modules.
Success will require sustained policy support, patient capital, technology partnerships, infrastructure development, and a long-term industrial vision.

If India can bridge the upstream gaps and continue building globally competitive manufacturing capabilities, it will not merely participate in the clean energy transition, it will help shape its future.

In the decade ahead, the countries that control solar manufacturing will influence far more than renewable energy markets. They will shape global trade, industrial growth, energy security, and the geopolitics of the low-carbon economy. India has an opportunity to become one of those countries, provided it transforms today’s manufacturing momentum into a resilient, integrated, and globally competitive supply chain.

- Tanmoy Duari, CEO, AXITEC Energy India Pvt. Ltd.