Govt incentives for upstream solar components could help Indian firms compete with cheap Chinese imports, says Premier Energies CBO Vinay Rustagi.
The company plans ₹6,000 crore capex for backward integration.
Rustagi said the subsidy would ease competition from Chinese exports.
Centre's plans to incentivise manufacturing of upstream solar module and cell components will end Indian companies' problem of competing with cheap Chinese imports, according to Premier Energies' Chief Business Officer (CBO) Vinay Rustagi. The Hyderabad-based solar cell and module manufacturer is seeking policy support from the government as it plans ₹6,000 crore capital expenditure for backwards integration.
His comments also come after the Ministry of New and Renewable Energy (MNRE) Secretary Santosh Kumar Sarangi said they are in talks with the Ministry of Finance to introduce a capital subsidy scheme for the above components, separate from the existing PLI scheme.
2 March 2026
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"I understand the proposal is in very advanced stages and could be announced anytime soon," said Rustagi, adding, "with this subsidy, the problem of competing with China and their cheap exports goes away."
While the current PLI scheme covers the entire solar manufacturing chain—from upstream processes like polysilicon refining, ingot and wafer production to downstream segments such as solar cells and modules—progress in the upstream segments has been relatively slow. So far, no ingot manufacturing capacity has been set up under the scheme. Only the Adani Group's solar unit manufactures 2 GW capacity of the upstream component in Gujarat.
As for other components like polysilicon and wafer, projects sanctioned under PLI constitute a small part of the total 48 GW manufacturing capacity under construction. Along with government-backed projects, Indian manufacturers have over 140 GW of solar PV module manufacturing capacity.
To reach this level, the government had to bring in different measures. First, imposing anti-dumping duties, which, as per Rustagi, led to no change on the ground.
"What happens is that the moment the government imposes a duty, the Chinese just drop the prices. They seemingly have an infinite capacity to bear losses and sell at lower and lower prices," he explained.
What helped, according to him, was the introduction of a non-tariff barrier in the form of ALMM (Approved List of Models and Manufacturers). The list introduced in 2021 essentially barred companies buying panels from outside India from participating in government tenders.
While the ALMM List I gave the names of approved solar PV module makers, List II, which is expected to come into effect from June this year, will restrict solar modules used in certain projects to contain cells manufactured domestically.
"The day that policy (ALMM List I) was announced, a lot of investment came into modules. Now last year the policy was announced for cells and something like ₹50,000 crore of investment in the industry is going into cells," said the Premier Energies CBO, adding that the government is now thinking of bringing in ALMM for ingots and wafers.
A November report by ICRA noted that ALMM List II could increase India's cell manufacturing capacity to 100 GW by December 2027.
