India added 50.6 GW of solar module capacity against 9.7 GW of cell capacity in the first half of 2026, highlighting a widening manufacturing gap and continued dependence on imported solar cells

India’s solar manufacturing industry continued to expand rapidly during the first half of 2026, but the pace of growth was significantly higher for solar modules than for solar cells. According to a Mercom India report, the country added 50.6 GW of solar module manufacturing capacity between January and June, compared with only 9.7 GW of solar cell capacity.

The difference means module capacity additions were more than five times the capacity added at the cell-manufacturing stage.

The widening gap between the two parts of the solar manufacturing chain is increasing the industry’s dependence on imported cells, even as India expands its domestic module manufacturing base.

India's Solar Module Capacity Reaches 261.7 GW

By the end of June 2026, India's cumulative solar module manufacturing capacity had reached 261.7 GW.

In comparison, cumulative solar cell manufacturing capacity stood at 36.6 GW.

The significant difference highlights an imbalance in the domestic solar manufacturing ecosystem. While India has rapidly increased its ability to assemble finished solar modules, domestic cell production has not expanded at the same pace.

Solar cells are a critical component of photovoltaic modules, meaning a shortage of domestic cell production can require manufacturers to source a greater proportion of their requirements from overseas markets.

Solar Cell and Module Imports Rise 18%

The capacity imbalance is already reflected in India's trade flows.

Imports of solar cells and modules increased 18 per cent during the first half of 2026 compared with the year-ago period, according to the Mercom India report.

Solar cells accounted for 81 per cent of total imports, while solar modules represented the remaining 19 per cent.

The data indicates that domestic module manufacturers continue to depend substantially on imported cells to maintain production and meet the growing demand for solar installations.

Why the Cell-Manufacturing Gap Matters

The difference between module and cell capacity has implications for India's objective of building a more integrated domestic solar manufacturing ecosystem.

A module can be assembled domestically even when some of its critical components are imported. However, greater domestic cell production can help reduce exposure to international supply chains, shipping costs, currency fluctuations and changes in global trade policies.

Expanding cell manufacturing could therefore become an important next stage of India's solar manufacturing strategy.

The industry will need investments not only in module assembly but also in upstream manufacturing capabilities, technology, equipment and supporting supply chains.

Gujarat Emerges as India's Solar Manufacturing Hub

Gujarat has established itself as the leading state in India's solar manufacturing landscape.

Nearly 45 per cent of the country's module manufacturing capacity is located in Gujarat. The state also accounts for more than 36 per cent of India's solar cell manufacturing capacity.

The concentration reflects Gujarat's growing role in renewable-energy manufacturing and its established industrial infrastructure.

Access to ports, industrial land, power infrastructure and logistics networks can provide advantages for manufacturers looking to establish large-scale solar production facilities.

Rajasthan and Tamil Nadu Follow in Module Capacity

Rajasthan and Tamil Nadu were ranked second and third, respectively, in terms of solar module manufacturing capacity.

Together, the two states account for nearly 19 per cent of India's total module manufacturing capacity.

The geographical spread of manufacturing capacity indicates that solar equipment production is gradually expanding beyond a few established industrial centres.

However, the high concentration of capacity among leading manufacturers remains an important feature of the industry.

Top 10 Manufacturers Account for 60% of Capacity

India's module manufacturing industry remains relatively concentrated.

The top 10 manufacturers account for approximately 60 per cent of the country's total module manufacturing capacity, according to the report.

This concentration means that a relatively small group of companies currently has a substantial share of domestic manufacturing capability.

As demand for solar installations increases, new entrants and capacity expansions could gradually broaden the manufacturing base. However, achieving scale and maintaining competitive costs will remain important challenges for smaller manufacturers.

Solar Module Prices Decline

The expansion in manufacturing capacity has also coincided with a decline in module prices.

The average selling price of domestically manufactured mono PERC modules declined 1.8 per cent quarter-on-quarter during the period covered by the report.

Lower module prices can benefit solar developers by reducing equipment costs and potentially improving the economics of new projects.

However, falling selling prices can put pressure on manufacturers' margins, particularly when capacity is expanding rapidly and competition is increasing.

Domestic Demand Continues to Support Capacity Expansion

India's ambitious renewable-energy targets have encouraged companies to invest heavily in solar manufacturing.

The country is seeking to expand renewable-energy capacity while reducing dependence on imported equipment and strengthening domestic clean-energy supply chains.

Growing solar installations create a large potential market for module manufacturers. However, the ability to meet this demand through domestically produced cells will become increasingly important as the manufacturing ecosystem matures.

Import Dependence Remains a Key Challenge

The 18 per cent increase in imports highlights one of the challenges facing India's solar manufacturing ambitions.

While domestic module production has expanded significantly, insufficient cell capacity means manufacturers remain exposed to international suppliers.

Changes in global prices, trade restrictions, shipping costs and geopolitical developments can therefore influence the economics of India's solar industry.

Building adequate domestic cell capacity could reduce some of these vulnerabilities over the medium to long term.

Opportunities for Solar Manufacturing Companies

The capacity gap also creates an opportunity for companies investing in solar cell production.

As module capacity continues to expand, additional domestic cell manufacturing could help address the mismatch between the two stages of the value chain.

Companies with access to technology, capital, manufacturing expertise and large-scale production capabilities could benefit from the increasing demand for domestically produced solar components.

However, cell manufacturing is more technologically complex and capital-intensive than module assembly, making execution and cost competitiveness critical.

What Investors Should Watch

For investors tracking India's renewable-energy and solar manufacturing sector, several factors will be important going forward.

These include the pace of new cell and module capacity additions, domestic solar installation growth, module prices, import volumes, government manufacturing incentives, technology upgrades and the financial performance of individual manufacturers.

The development of a more integrated supply chain could also influence the long-term competitive position of Indian solar equipment companies.

Market Outlook

India’s solar manufacturing industry is expanding rapidly, but the first-half 2026 data highlights a significant imbalance between module and cell capacity. The addition of 50.6 GW of module capacity compared with 9.7 GW of cell capacity shows that module manufacturing is growing more than five times as quickly.

The resulting dependence on imported cells is reflected in the 18 per cent increase in solar cell and module imports during the first half of the year. With cells accounting for 81 per cent of imports, increasing domestic cell capacity is likely to remain an important priority for the industry.

Gujarat's dominant position in both module and cell manufacturing gives the state a particularly important role in India's clean-energy supply chain. Going forward, the pace of cell-capacity expansion, module pricing, solar installation demand and the ability of manufacturers to achieve competitive production costs will determine how quickly India can move towards a more integrated domestic solar manufacturing ecosystem.