India’s PLI scheme faces delays as module commissioning falls behind target: report

JMK Research and IEEFA recommended a second-phase, manufacturing-linked PLI scheme offering tax credits.

India’s production linked incentive (PLI) scheme for high-efficiency solar PV modules has attracted strong industry response and sizable investment but continues to face implementation delays and upstream supply constraints, according to a new joint report by JMK Research and the Institute for Energy Economics and Financial Analysis (IEEFA).

Launched in 2021 with a budget of ₹4,500 crore (about US$517m) and topped up in 2022 with an additional ₹19,500 crore (US$2.24b), the scheme now totals ₹24,000 crore (US$2.76b).

The programme aims to boost India’s domestic manufacturing capacity across the solar value chain, from polysilicon to modules.

As of June 2025, India had built a capacity of 3.3 GW in polysilicon, 5.3 GW in wafer, 29 GW in cell, and 120 GW in module manufacturing.

All existing upstream capacity—polysilicon and wafer—was established under the PLI scheme. Since 2022, the country has added about 82 GW of module and 22.7 GW of cell capacity.

However, commissioning remains behind targets. Of the 65 GW of module capacity initially targeted, only 31 GW had been commissioned by mid-2025.

Actual investments totalled ₹48,120 crore (US$5.5b) with around 38,500 direct jobs created, compared with targeted investments of ₹94,000 crore and 195,000 jobs.

JMK Research and IEEFA said India still depends heavily on imported upstream inputs, machinery, and technical expertise, with limited domestic polysilicon and wafer manufacturing. Visa delays and equipment-supply constraints have also slowed plant ramp-ups.

The report identified several policy and market frictions. The current incentive design favours fully integrated manufacturing plants, requiring high upfront capital whilst covering only a small share of production costs.

Meanwhile, policy asymmetry persists between downstream and upstream segments, as the Approved List of Models and Manufacturers (ALMM) restricts module imports but allows upstream imports to remain largely unregulated.

Global volatility in polysilicon and wafer prices, combined with China’s upstream dominance, adds further risk.

Across both PLI tranches, the report estimated that awardees face cumulative financial exposure of about ₹41,834 crore (US$4.8b) from potential bank guarantee losses, forfeited incentives, and unrealised sales if they fail to meet compliance terms.

To strengthen India’s solar manufacturing base, JMK Research and IEEFA recommended a second-phase, manufacturing-linked PLI scheme offering tax credits, low-cost finance, and risk buffers against global price shocks.

They also called for layered incentives with longer tenures, targeted support for critical components, and greater policy coherence and institutional coordination.