Image: Waaree Energies
India’s solar module manufacturing capacity is expected to surpass 125 GW in 2025, more than triple the country’s current domestic demand of around 40 GW, according to a new analysis by Wood Mackenzie.
The consultancy said in its latest report that this rapid expansion could result in an inventory buildup of 29 GW by Q3 2025, up from 13 GW in late 2023 and 22 GW in late 2024.
Wood Mackenzie noted that while the surge reflects the success of India’s production-linked incentive (PLI) scheme, it coincides with a sharp downturn in the country’s primary export market — the United States.
Due to the 50% reciprocal tariffs imposed by the U.S., Indian solar module exports to the U.S. fell 52% in the first half of 2025 compared to the same period in 2024.
“India’s PLI scheme has been highly effective in spurring factory announcements, but the industry is now seeing warning signs of rapid overcapacity similar to those that preceded China’s recent price collapse,”— Yana Hryshko, Head of Solar Supply Chain Research, Wood Mackenzie.
The report also highlights cost challenges as a major obstacle. An Indian-assembled module using imported solar cells costs at least $0.03/W more than a fully imported Chinese module, while a 100% domestically made Indian module could cost more than double that of a Chinese counterpart.
Despite these challenges, Hryshko said India remains the most credible large-scale alternative to China’s solar supply chain, provided it focuses on improving cost-competitiveness through innovation.
“This will require aggressive R&D, investment in next-generation technology, and a strategic push to open new export markets in Africa, Latin America, and Europe,” Hryshko said. “The foundation is built; this is the next step to securing long-term success.”
Wood Mackenzie’s analysis also underscores India’s protective measures to support domestic manufacturers, including the Approved List of Models and Manufacturers (ALMM) and a proposed 30% anti-dumping duty on Chinese solar cells and modules.
As of mid-2025, India’s PLI program had established 18.5 GW of module capacity, 9.7 GW of solar cell capacity, and 2.2 GW of ingot-wafer capacity. Government data further shows that the scheme had awarded a total of 48 GW in module manufacturing capacity by the same period.
