As solar energy use increases in India, the focus is also shifting towards strengthening domestic manufacturing. However, progress in this sector depends not just on the capacity to manufacture solar panels but also on the availability of the machinery, technology and raw materials needed to produce them. In this context, China’s proposed export restrictions could pose a new challenge for India’s solar industry.
Let us understand how this move could affect rooftop solar prices, domestic manufacturing and investment opportunities.
What’s Happening?
China is considering a proposal to restrict the export of 12 technologies related to solar manufacturing. These include processes used in silicon wafer production, advanced solar cells and polysilicon manufacturing. Technologies such as TOPCon, Heterojunction and Back-contact, along with Perovskite and Tandem cell technologies, are also covered under the proposed controls. The public consultation period for this proposal runs until 15 November 2026.
This is not a complete ban on the export of finished solar panels. The proposal mainly targets the technologies and processes used to manufacture them. Therefore, an immediate and significant impact on rooftop solar prices in India is likely to be limited. However, if access to machinery and technology becomes restricted over the longer term, production costs could increase.
In India, schemes such as PM Surya Ghar and PM-KUSUM also promote domestic manufacturing through the Domestic Content Requirement (DCR). In this situation, the challenge is not just to ensure the availability of solar panels but also to maintain the ability to manufacture them at competitive costs.
India’s Dependence in Solar Manufacturing
India has expanded its solar module manufacturing capacity, but a significant gap remains in solar cell production and access to advanced manufacturing equipment. According to the Council on Energy, Environment and Water (CEEW), as of March 2026, the country’s solar module manufacturing capacity stood at approximately 173 GW, while solar cell capacity was nearly 30 GW.
One of the major reasons for this dependence is the need to import machinery. According to a report released by The Energy and Resources Institute (TERI) in January, India imports more than 90% of its high-end solar manufacturing machinery. This means that despite the growth in domestic production capacity, the industry continues to depend on foreign suppliers for advanced technology and equipment.
A similar situation exists in battery manufacturing. According to IISD data, India imported $1.5 billion worth of battery cell manufacturing machinery from China in 2022. This dependence suggests that changes in China’s export policy could affect the energy storage industry as well as solar manufacturing.
Does India Have Other Options?
India can source machinery and technology from countries such as Germany, South Korea, Japan, Italy and Australia. However, some suppliers in these countries also depend on China for parts of their supply chains. Therefore, simply shifting imports to other countries may not offer a long-term solution.
Developing advanced manufacturing equipment within India is also a time-consuming process. According to available industry assessments, achieving self-reliance in equipment manufacturing could take around three years under the most favourable conditions. In practice, however, the process could take up to five years.
During this period, Indian companies could face challenges related to technology, investment and production costs. China’s large manufacturing capacity and competitive pricing could also put pressure on the margins of Indian companies. Therefore, domestic manufacturers will need to invest in technological development alongside efforts to expand production capacity.
What Does This Mean for Investors?
India’s solar manufacturing sector continues to offer scope for expansion. According to industry estimates published by NDTV, module manufacturing capacity could reach 25 GW in the financial year 2026 and 60 GW in the financial year 2027. Meanwhile, according to Money Control, the Union Minister has expressed hope that capacity will reach 70 GW by December 2026 and exceed 100 GW by May–June 2027.
As the sector expands, investment in research and development (R&D) will also become important. Industry recommendations suggest that companies should allocate 2–3% of their revenue to R&D. For example, a company with revenue of Rs 1,000 crore would need to spend Rs 20–30 crore on technological development.
Therefore, investors should look beyond a company’s production capacity. Its technical capabilities, access to machinery and ability to control production costs will also matter.
What’s Next?
For India, developing domestic capabilities in technologies such as TOPCon, Back-contact and Perovskite-silicon Tandem will be important. There is also a need to develop solar panels suited to Indian conditions and strengthen research efforts.
Overall, China’s proposed export restrictions are unlikely to have an immediate and significant impact on rooftop solar prices in India. However, they highlight the domestic industry’s dependence on foreign technology and machinery. Over the longer term, a stronger supply chain, greater investment in domestic R&D and advanced manufacturing capabilities could help make India’s solar industry more self-reliant.
Disclaimer: This article is for educational and informational purposes only and does not constitute investment advice or a recommendation to buy or sell any securities. The companies mentioned are cited as examples within the context of market developments. Investors are advised to conduct their own due diligence and consult their financial advisor before making any investment decisions.
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