Policy Context and National Targets
- India aims to achieve 500 GW non-fossil fuel capacity by 2030.
- Production Linked Incentive (PLI) schemes serve as the primary industrial policy instrument.
- PLI rewards firms only after achieving pre-agreed annual sales performance targets.
- Ministries expect PLI to shift India from net importer to global manufacturing hub.
Solar Manufacturing Performance Gaps
- Downstream solar module assembly achieved around 56% of target by mid-2025.
- Upstream segments remain bottlenecks due to high technological and capital requirements.
- Polysilicon manufacturing reached only 14% of its assigned target.
- Wafer manufacturing achieved merely 10% of its respective target levels.
- Heavy dependence continues on imported raw materials and specialised technical expertise.
Government Response and Capital Subsidies
- Authorities consider additional capital subsidies to de-risk upstream solar projects.
- Upstream manufacturing demands high capital expenditure and advanced technology capabilities.
- Subsidies aim to reduce risks for firms entering technology-intensive production stages.
Battery Manufacturing Progress and Constraints
- Target set for 50 GWh domestic battery cell capacity with ₹18,000 crore outlay.
- By late 2025, only 1.4 GWh commissioned, representing 2.8% of the target.
- Domestic value addition norms require 25% within two years and 60% within five.
- Construction of gigafactories presents major technical and infrastructure barriers.
- Restrictions on Chinese technical experts’ visas delay facility setup and operations.
Limitations of Capital-Centric Approach
- Capital support alone cannot overcome decades of research and workforce training gaps.
- High-technology manufacturing requires long-term expertise and technical ecosystem development.
- International technology transfers remain capital-intensive with limited near-term benefits.
- Several firms face financial penalties for missing PLI delivery deadlines.
Policy Reorientation Suggestions
- PLI framework needs to prioritise technical expertise over corporate net worth.
- Greater focus required on skills, know-how, and sustained industrial learning systems.