From Baby Steps to Bold Leaps: India’s Next Green Frontier is Manufacturing

For more than two decades, renewable energy project developers have led India’s march to green energy growth. The independent power producers (IPPs) have helped grow the sector in gigawatts and have also shaped the country’s policies while doing that. But as India steers in the direction of self-sustained energy security, the green energy manufacturers have taken over to draft the next chapter of India’s energy future. From conglomerates expanding into solar equipment manufacturing to new age tech startups launching innovations in green fuel, energy storage and public sector giants reorienting their investment plans - all are riding on the green manufacturing boat. Indian states are also luring investors to set up green manufacturing plants. 

Green Manufacturing is the new poster boy

The global supply chains which took a beating during the Covid pandemic have failed to recover completely till date, thanks to one crisis after another. 

At the height of the Covid pandemic, the Indian government created an all encompassing plan of ‘Aatmanirbhar Bharat (self-reliant) India’ to boost domestic manufacturing across key sectors. The plan since then has evolved and diversified across industries including green energy.

There have been more than a dozen ‘production linked incentive (PLI) schemes to push the domestic manufacturing ecosystem in various sectors. Solar equipment manufacturing tops the list of priorities with one of the highest grants worth Rs 12,000 crore. Leading sector players were awarded the projects over the last five years, which are now seeing the light of the day and also showing the path to self-reliance.

The federal government in recent years has taken several initiatives along with the schemes to restrict imports in order to boost indigenous manufacturing. In the green energy sectors, where India is a leading market, national and global players are keen to set up shop. 

Nondescript locations across several states are now on the growth map of the country with mega manufacturing zones, which will churn out solar panels, electronic equipment, electrolysers and allied green energy supply chains. 

Tirunelveli in Tamil Nadu is one such location where the salt-to-steel conglomerate Tata Group has set up its maiden solar photovoltaic (PV) plant. The trading hub of the Cholas during 300 BC, Tirunelveli is now being touted as the ‘green energy capital’ of Tamil Nadu. With a capacity of 4.3 GW and spread over 317 acres, Tata Power Company Ltd (TPCL) claims it to be the largest single location solar PV manufacturing facility in the country. 

Tata’s ambitious plans in Tirunelveli come at a time when India imported cells and modules worth $2.2 billion during the first half of 2024, a 60 per cent increase compared to the same period last year, with China contributing the majority of it. Exports of these two from India were reportedly at $1.1 billion, up 19 per cent compared to last year, according to government data. 

In the same state, a little closer to the capital city of Chennai, US-based First Solar has set up its first-ever solar manufacturing unit in India. At Sriperumbudur, First Solar is setting up 3.5 GW of solar module manufacturing and is also catalysing the creation of an indigenous supply chain of downstream equipment. It has invested $700 million in setting up India's first integrated solar manufacturing plant. 

Towards the west, India’s two biggest family run businesses are building mega factories in Gujarat for the green energy supply chain. Already known for being a first mover in setting up large renewable energy projects, the Arabian sea-facing state is seeing the emergence of manufacturing - both for domestic and export markets. 

Adani Enterprises has set up end-to-end solar manufacturing at its Mundra port and special economic zone (SEZ). This is also where it is building an ancillary industry for solar manufacturing and also aiming to have sizable green fuels and green hydrogen capacity. Similarly, in Jamnagar, Mukesh Ambani led Reliance Industries Ltd (RIL) is in process of setting up four ‘gigafactories’ of which three are dedicated to solar, green hydrogen and battery manufacturing.  

Another PLI winner Indosol  (a subsidiary of Shirdi Sai Electricals) in Andhra Pradesh, is developing an integrated solar manufacturing ecosystem as a key beneficiary of the government’s PLI scheme. The company has commenced operations at its Ramayapatnam facility, which serves as an end-to-end manufacturing hub aimed at reducing dependence on imported raw materials. Much like the mega-complexes in Gujarat, Indosol is building a vertical supply chain that scales from polysilicon, ingots, and wafers to high-efficiency cells and modules. With an ultimate target of 30 GW of integrated capacity, the facility is positioned to be a cornerstone of India’s green manufacturing export strategy.

Thanks to the states getting on the bandwagon of manufacturing, indigenous solar module manufacturing capacity has crossed 144 GW per annum, with about 81 GW added in calendar year 2025 alone.

Re-alignment of internal and external policies

As new trade partnerships unravel under the cloud of Trumpian tariff wars, the Indian government is realigning its external policies. Trade partnership with China, which was shunned since the Galwan valley clash, is now being revived. Aimed at rebuilding the supply chain especially for raw materials for key green energy sectors, the Indian government is now relaxing trade regulations with China.

The rationale is that the first steps into manufacturing of new age sectors would require external assistance. ‘As long as it's made in India, the country is open to do business with any nation offering support, technology, expertise and key materials,’ is becoming the key narrative in corridors of power. Recent policy endeavours to attract foreign investment in the critical mineral supply chain is a testament to this approach.

In a significant strategic shift, the government has moved to expedite visas and streamline investment clearances for Chinese technicians and engineers. This "opening of borders" for expertise is seen as a pragmatic necessity to ensure that the multi-billion dollar PLI schemes do not stall due to a lack of technical oversight during the installation and commissioning of advanced manufacturing lines. By facilitating easier entry for technical professionals, India aims to bridge the immediate skill gap while simultaneously building long-term domestic capacity.

Strengthening the Backbone: Infrastructure and Policy Recommendations

As wars on both sides of the globe expose the over-reliance on imported fossil fuels, the path to self-reliance goes through building its own supply chain of green energy. While the initial steps are in the right direction, several policy interventions are still required to sustain this momentum. Some of them are: 

1. Green Energy Corridor (GEC) Phase-III: To support the massive influx of renewable manufacturing, the government is readying a cabinet note for GEC Phase-III. This phase is expected to focus on integrating large-scale Battery Energy Storage Systems (BESS) and providing Viability Gap Funding (VGF) to ensure that the intermittent nature of renewables does not destabilize the grid. This infrastructure is vital for evacuating power from the new manufacturing hubs to the national load centers.

2. Financial Support for Ecosystem Depth: The Indian solar industry has sought an additional support package of approximately Rs 25,000 crore. This capital is not just for modules, but for the "upstream" ecosystem—specifically for ingots, wafers, and polysilicon manufacturing. Diversifying the incentive structure to include these raw components will reduce the dependency on Chinese imports for the basic building blocks of solar cells.

3. Standardization and Quality Control: As manufacturing scales, implementing strict Quality Control Orders (QCOs) and maintaining the Approved List of Models and Manufacturers (ALMM) will be essential to ensure that domestic products remain globally competitive and durable.

4. Supply Chain Decoupling and Allied Industries: Policy focus must shift toward ancillary manufacturing, such as solar glass, backsheets, and specialized chemicals. By incentivizing the entire value chain, India can insulate itself from global commodity price volatility.
   
   

By aligning external trade pragmatism with internal infrastructure spending, India could transform from a mere consumer of green technology to a global manufacturing powerhouse.

Shubhang Parekh is Assistant Director - Strategy, Manufacturing and Public Relations at the National Solar Energy Federation of India.