- India extends ALMM framework to include solar ingots and wafers from June 1, 2028
- China controls over 95% of global solar wafer production capacity, dominating supply chains
- India's imports of Chinese solar cells surged 141% in FY25 despite import restrictions
India has taken another step in its long-running effort to reduce dependence on China in the solar sector.
After targeting imported solar modules and cells over the last few years, the Centre has now moved further upstream. The Ministry of New and Renewable Energy (MNRE) has extended the Approved List of Models and Manufacturers (ALMM) framework to include solar ingots and wafers -- two critical components that sit at the heart of the solar manufacturing value chain.
The new ALMM framework will come into effect from June 1, 2028. Once implemented, all solar projects, including net-metering and open-access projects, will have to use wafers listed under the approved domestic framework.
The move is being seen as India's most direct attempt yet to challenge China's overwhelming dominance in the global solar supply chain.
Why Wafers And Ingots Matter
Solar panels may be the most visible part of a solar project, but they are only the final product in a long manufacturing chain.
Polysilicon is converted into ingots. Ingots are sliced into wafers. Wafers are then turned into solar cells, which are assembled into modules or panels.
India has made rapid progress in module manufacturing and is expanding cell production. But wafers and ingots remain a major weak spot.
That dependence has given China enormous leverage over global solar supply chains.
China's Grip On Solar Industry
China's dominance in solar manufacturing is unlike almost any other industrial sector.
According to the International Energy Agency (IEA), China controls more than 80 per cent of global manufacturing capacity across every major stage of solar panel production, including polysilicon, ingots, wafers, cells and modules. The country has invested more than $50 billion in solar manufacturing capacity over the past decade.
The dominance becomes even more pronounced in wafers.
Industry estimates cited by global energy researchers show China accounts for roughly 95-97 per cent of global wafer production capacity, making it the undisputed king of the most critical upstream segment of the solar industry.
China's manufacturing scale, low-cost financing, subsidies and integrated supply chains have enabled it to become the world's cheapest supplier of solar equipment. In the first half of 2024 alone, the country exported a record 120 GW of solar modules after aggressively cutting prices.
India's Dependence Remains Significant
India has made progress in reducing reliance on imported modules, helped by the Production Linked Incentive (PLI) scheme, basic customs duties and earlier ALMM requirements.
Yet dependence on China remains substantial, especially for cells, wafers and upstream materials.
A report highlighted by the India Brand Equity Foundation (IBEF) noted that while China's share in India's solar cell imports fell to 56 per cent and its share in module imports declined to 65 per cent in FY24, India still remains heavily dependent on imports for wafers because domestic commercial-scale wafer production is yet to take off.
Official trade data also showed India's imports of solar photovoltaic cells from China surged sharply in FY25 despite restrictions on imported modules. Imports of Chinese solar cells jumped 141 per cent year-on-year, underlining how deeply the upstream supply chain remains tied to China.
This is precisely the gap the government is now trying to address.
A Policy Aimed At Strategic Security
Industry leaders believe the latest reform goes beyond manufacturing. It is also about energy security.
"The ALMM 3 policy is designed to break China's complete monopoly on the global ingot-wafer industry and improve India's energy security," said Vinay Rustagi, Chief Business Officer at Premier Energies.
Rustagi expects investments of up to Rs 50,000 crore over the next three years, potentially creating 80 GW of wafer and ingot manufacturing capacity -- enough to meet domestic demand.
He acknowledged that locally produced wafers may initially cost more than imports because Chinese manufacturers benefit from enormous scale and state support. However, he argued that the gap would narrow over time as India's ecosystem matures.
According to Rustagi, the long-term benefits of supply security, lower transaction risks and domestic capability creation could outweigh the higher initial costs.
The Challenge Lies In Execution
Not everyone believes the transition will be easy.
Hanish Gupta, Founder and Managing Director of Sunkind India Limited, described ALMM-3 as "the right policy in principle" but warned that implementation would be crucial.
According to Gupta, India has successfully built module manufacturing capacity and is rapidly adding cell production. However, wafers and ingots remain the weakest links in the country's solar supply chain.
He said the extension of ALMM to these segments sends a strong signal that India's clean-energy ambitions must be backed by deeper manufacturing capabilities rather than assembly alone.
Gupta believes the policy could attract fresh investments, technology partnerships and greater backward integration. But he also cautioned that India currently lacks adequate commercial-scale wafer and ingot capacity to meet rapidly growing solar demand.
Building such capacity will require large capital investments, technology access, competitive manufacturing costs and policy stability.
"If implementation timelines are too aggressive, the industry could face supply constraints, increased costs and delays in project execution," Gupta said.
India's Solar Ambitions Are Getting Bigger
The stakes are high.
India has set an ambitious target of achieving 500 GW of non-fossil fuel power capacity by 2030. Solar energy is expected to account for a major share of that growth.
That means securing the supply chain is becoming just as important as installing new capacity.
The government's earlier interventions helped create a domestic module manufacturing industry that barely existed a few years ago. India's module manufacturing capacity has already crossed 90 GW, according to official data.
The next battle is upstream. By bringing wafers and ingots under the ALMM framework, New Delhi is effectively signalling that the era of assembling imported components may no longer be enough.
