India’s Solar Component Market May Double to USD 7.8 Billion by March 2028: CEEW

India’s market for solar module components could expand 2.2 times to USD 7.8 billion (INR 74,100 crore) by March 2028 from approximately USD 3.6 billion (INR 34,200 crore) in September 2026, driven by planned domestic manufacturing capacity additions and rising demand from solar module manufacturers, according to a study by the Council on Energy, Environment and Water (CEEW).

The study, released at the Bharat Renewable Energy Summit & Expo 2026 in New Delhi, examined the manufacturing ecosystem for solar module bill of materials (BOM), which includes solar glass, aluminium frames, copper ribbons, encapsulant sheets, backsheets and junction boxes. These components constitute the materials used in a solar module apart from the solar cells.

India's solar module manufacturing capacity stood at 228.5 GW in September 2026, creating additional demand for domestically manufactured components. CEEW said manufacturers were expanding production capacities to cater to the requirements of the growing module industry, although the timely commissioning of announced facilities and assured demand would be critical to achieving the projected market growth.

Domestic annual manufacturing capacities of solar BOM components varied significantly in September 2026, ranging from 20 GW for solar glass to 153 GW for junction boxes. According to the study, planned expansions could enable domestic manufacturers of aluminium frames, copper ribbons and encapsulants to meet India's estimated annual solar module demand of around 67 GW by March 2027. Solar glass capacity is expected to reach the required level by March 2028, while existing junction box manufacturing capacity is already sufficient.

Backsheets remain an exception, as manufacturers have not announced additional capacity, partly due to the growing adoption of glass-glass solar modules.

The study identified demand certainty and the ability to meet cost and performance requirements as important factors determining the uptake of domestically manufactured components. Consultations with industry stakeholders indicated that solar module manufacturers were willing to shift from imported products to domestic alternatives, provided the latter offered comparable prices and quality.

India's growing dependence on imported solar components has created an opportunity for domestic manufacturers to expand their market share. Between FY2021 and FY2026, the value of solar glass imports increased at an annual rate of 63 per cent, from USD 129 million to USD 1.48 billion. Aluminium frame imports grew at an annual rate of 88 per cent, while junction box imports increased by 92 per cent.

China accounted for 66 per cent of India's solar glass imports and 70 per cent of aluminium frame imports in FY2026. Vietnam and Thailand supplied 34 per cent and 31 per cent, respectively, of India's encapsulant imports.

CEEW said greater domestic sourcing could reduce the exposure of solar module manufacturers to international price fluctuations and trade-related decisions in overseas markets.

The study also pointed to changes in international trade policies that could affect the competitiveness of imported components. China withdrew its value-added tax rebate on photovoltaic exports in April 2026, while India's anti-dumping duties on solar glass, aluminium frames and EVA encapsulants remain in force until 2029. These measures increase the landed cost of imports.

However, CEEW cautioned that the benefits of these trade measures would depend on domestic manufacturing facilities being commissioned on schedule. Delays in capacity additions could increase the cost of solar module manufacturing.

Apart from expanding manufacturing capacity, the study highlighted the need to strengthen domestic capabilities in advanced component technologies and standardised quality testing.

Indian manufacturers have opportunities to develop newer variants, including multi-busbar and reflective ribbons that can improve module efficiency, low-temperature ribbons for heterojunction cells and composite frames. However, manufacturers continue to rely on imported raw materials for several components.

The absence of standardised testing criteria across the industry is another challenge, with individual manufacturers following different testing practices. CEEW also noted that none of the six solar BOM components has a dedicated Harmonised System (HS) customs classification. As imports are recorded under multiple codes, India's component-wise import data remains based on estimates, while enforcement of anti-dumping duties becomes more difficult.

Rishabh Jain, Fellow at CEEW, said India had demonstrated its ability to manufacture solar modules at scale, but the next challenge was to produce the components at comparable scale and quality. He said sustained investment and domestic demand could help India develop an alternative global supply chain for solar BOM components.

The second CEEW study released at the summit examined opportunities to localise battery electrolyte manufacturing in India. It found that the country's chemical industry already possesses much of the industrial capability required to manufacture battery-grade electrolyte, with the main gaps relating to purity standards, testing infrastructure and specialised equipment rather than manufacturing technology.

Electrolyte accounts for approximately 5 per cent of a battery cell's total cost and is essential for its performance and safety. Indian companies have announced domestic battery cell manufacturing capacity of around 150 GWh. Based on this capacity, CEEW estimates that India would require between 60,000 tonnes and 90,000 tonnes of electrolyte annually.

Despite the existing capabilities in the chemical sector, nearly all battery electrolyte is currently imported, according to the study.

One of the major constraints is the limited availability of accredited domestic laboratories for testing battery-grade electrolyte. Indian producers currently send samples to facilities in South Korea, Japan and Germany for testing and approvals. This process adds several months to the approval timeline, apart from laboratory fees and courier costs.

CEEW estimates that establishing a domestic testing laboratory would require an investment of approximately USD 1.6 million (INR 15 crore).

Dr Akanksha Tyagi, Senior Programme Lead at CEEW, said India's chemical industry and research institutions had existing capabilities in raw materials, machinery, manufacturing processes and skilled personnel that could be used to develop commercial-scale electrolyte production.

To support domestic solar component manufacturing, CEEW has recommended introducing dedicated customs codes for each solar BOM component variant before the Union Budget 2027–28. It has also called for uniform testing standards to be developed by the Ministry of New and Renewable Energy (MNRE), the Bureau of Indian Standards (BIS) and industry stakeholders.

The study has proposed bringing all six solar BOM components under the Approved List of Models and Manufacturers (ALMM), with the list to be introduced by January 2028 and made effective from January 2029. It has also recommended extending the Domestic Content Requirement (DCR) to these components from January 2028.

For battery components, the recommendations include establishing domestic testing laboratories with certification systems recognised by international markets, introducing phased local sourcing requirements and creating an Approved List of Battery Component Manufacturers.

CEEW has further proposed milestone-linked capital subsidies for battery cell components and joint ventures through which Indian companies can co-own the technologies they develop.

The solar BOM study drew on manufacturing capacity data from the Solar Ancillary Manufacturers' Association as of September 2026, Ministry of Commerce and Industry trade data for FY2021 to FY2026, and consultations with 14 stakeholders across the component manufacturing and testing ecosystem. Both studies were supported by the New Energy Industrial Strategy (NEIS) Center.