India’s solar manufacturing industry may be heading toward a wave of consolidation over the next two to three years as manufacturers grapple with rising input costs, regulatory uncertainty, overcapacity, and increasing competition.

Hiten Parekh, Chief Business Officer at GREW Solar, expects aggressive pricing over the next two to three quarters as manufacturers compete for orders amid oversupply. He believes the market could eventually consolidate around 20 to 25 major cell and module manufacturers with the financial strength and upstream integration capabilities to sustain operations.

In an exclusive interview with Mercom India at the REI Expo 2026, Parekh discussed the challenges domestic solar manufacturers face, the potential impact of U.S. trade restrictions and proposed Chinese solar technology export controls, and Grew Solar’s plans to expand its cell, module, and wafer manufacturing capacities.

What are the biggest challenges currently facing India’s solar manufacturing industry?

One of the biggest challenges is regulatory uncertainty, particularly whether the existing Approved List of Models and Manufacturers (ALMM) List II provisions will extend beyond December or whether the industry will fully transition to ALMM-compliant modules.

The uncertainty makes it difficult for customers to decide how to procure solar modules, design projects, and arrange financing.

Manufacturers are also struggling with rising raw material prices, higher logistics costs, and increasing margin pressure. While customers expect solar module prices to decline, manufacturing and procurement costs have been rising.

These challenges make it increasingly difficult for manufacturers and developers to plan investments and procurement strategies.

What is your view on extending the ALMM List II provisions? How would greater regulatory clarity benefit the industry?

We support any policy that accelerates renewable energy deployment in the country, whether it involves ALMM or Approved List of Cell Manufacturers (ALCM) compliant modules.

Our primary request is for medium- to long-term policy clarity.

Greater visibility into future requirements would help developers make informed decisions about equipment sourcing, project financing, and capital expenditure. The objective should be to support continued renewable energy expansion while giving the industry enough certainty to plan investments.

How are developers adjusting their procurement strategies amid uncertainty over ALMM and ALCM requirements?

Developers have become proactive in their sourcing strategies. Many are finalizing procurement contracts six to eight months in advance to avoid remaining exposed to regulatory uncertainty.

Some developers are also adopting blended procurement strategies by combining ALMM- and ALCM-compliant modules within their procurement arrangements. This allows them to balance pricing while preparing for potential changes in regulatory requirements.

By securing supplies well before project execution, developers aim to reduce uncertainty around module availability and procurement costs.

How have rising raw material prices, solar cell costs, and logistics expenses affected manufacturers’ margins?

Manufacturers face a difficult situation: input costs are rising while customers continue to expect lower module prices. Higher container shipping charges and logistics costs have increased manufacturing costs.

The prices of propylene and certain other raw materials have increased by about 2.5 times compared with levels before February. Solar cell prices have also increased by at least 1.5 times over the past six months.

These increases are squeezing manufacturers’ margins, especially when competitive market conditions make it hard to pass the full cost increase on to customers.

How are U.S. trade restrictions and geopolitical developments affecting Indian solar manufacturers’ export opportunities?

U.S. trade measures, including Section 232 trade barriers and anti-dumping and countervailing duties, have significantly changed the export environment for Indian solar manufacturers.

These measures have effectively constrained immediate opportunities for Indian manufacturers to export domestically manufactured solar modules directly to the U.S.

Companies seeking to serve the U.S. market need to consider local sourcing arrangements or direct investments in manufacturing facilities within the country.

At the same time, changes in Chinese solar cell export flows following U.S. trade measures have created uncertainty over the availability of Chinese cells for other markets, including India.

These developments are forcing manufacturers to reassess their international supply chains and market strategies.

How could potential Chinese restrictions on solar manufacturing equipment exports affect India’s manufacturing expansion?

Any restrictions on exports of solar manufacturing technology or equipment from China could create significant challenges, particularly for Indian manufacturers still establishing production facilities.

Many manufacturers depend on imported equipment to build new manufacturing lines. Restrictions or delays in equipment deliveries could disrupt their project implementation schedules.

Financing could also become more challenging. Lenders may become increasingly cautious about advance payments to equipment suppliers when machinery delivery is uncertain.

However, such restrictions could encourage manufacturers to diversify their equipment sourcing strategies. Over the longer term, alternative supply chains could emerge from Europe, Turkey, and Southeast Asia.

Although this transition could create short-term disruptions, it could eventually help Indian manufacturers reduce their dependence on a single country for critical production equipment.

With solar manufacturing capacity expanding rapidly, is India an oversupplied market? How could this affect prices?

The market is clearly facing an oversupply. Manufacturing capacity has expanded significantly, with about 225 GW of module capacity and 38 GW of cell capacity, against an annual domestic solar installation pace of around 40-45 GW.

As more manufacturers compete for orders, we expect very aggressive pricing over the next two to three quarters.

Some companies may offer significantly lower prices to secure customers and maintain production volumes, even if it pressures profitability. However, this situation may not be sustainable for every manufacturer.

Companies unable to maintain operations or fulfill long-term commitments to customers could face financial difficulties. Once these weaker manufacturers struggle to remain competitive, we expect prices to normalize.

Do you foresee consolidation in India’s solar manufacturing industry over the next two to three years? What will determine which manufacturers survive?

I believe about 20 to 25 major manufacturers will be able to sustain operations over the long term. Solar manufacturing requires significant capital investment, and companies must be prepared for periods of pricing pressure and market volatility.

The manufacturers that remain competitive will be those willing to make long-term investments and move beyond module assembly and solar cell manufacturing.

Upstream integration, particularly into wafer slicing and related manufacturing processes, will become increasingly important.

Companies with stronger financial positions and greater control over their manufacturing supply chains will be better equipped to withstand market fluctuations.

What is Grew Solar’s current manufacturing capacity, and what expansion plans does the company have?

We are expanding our domestic manufacturing capabilities across solar cells and modules, focusing on developing an integrated manufacturing ecosystem.

We have established 3.5 GW of annual solar cell manufacturing capacity under the first phase of our expansion. In the second phase, we plan to add another 5.5 GW of solar cell capacity over the next 12 months. This will take our total solar cell manufacturing capacity to 9 GW. We are also targeting 6.5 GW of domestic solar module manufacturing capacity.

Our manufacturing portfolio includes Made-in-India G12R solar cells, reflecting our focus on expanding domestic production capabilities and meeting the evolving requirements of the Indian solar market.

Could you elaborate on Grew Solar’s upstream integration plans and its proposed wafer manufacturing facility in Madhya Pradesh?

We have committed to investing in an 8 GW wafer slicing facility in Madhya Pradesh. We are targeting the facility to become operational during 2027–2028.

The investment is part of our strategy to expand beyond solar cell and module manufacturing and establish capabilities further upstream in the solar value chain.

As the industry becomes increasingly competitive, we believe manufacturers must focus on deeper integration to strengthen their long-term position.