India Solar Manufacturing — Policy Synthesis
Industry Roundtable Evidence × Trade Analytics | NZIPL
1 Purpose and framing
This document integrates two distinct evidence streams on India’s solar value chain:
- NZIPL Industry Roundtable (Solar PV, New Delhi, February 25 2026) — qualitative insights from manufacturers, research scientists, and policymakers attending two sessions co-organised by NZIPL.
- NZIPL Trade Analytics — BACI bilateral trade data 1995–2024 processed through the Clean Value Chain Explorer (CVCE), with Predicted Competitiveness (PC) scores and ORBIS firm-level data.
The two streams are complementary but cover different registers: the roundtable surfaces constraints as experienced from inside the industry; the trade data reveals structural patterns that are often invisible to individual firm participants. The synthesis identifies where both sources point in the same direction (convergent evidence), where they diverge or add nuance (productive tensions), and what combined analytical reading implies for industrial policy.
3 Productive tensions: where the sources diverge or add nuance
3.1 PLI vs RLI: scale vs breadth
Industry Roundtable (split view) — Some participants argued the PLI scheme “favours large, incumbent players” and proposed a Roadmap-Linked Incentives (RLI) scheme that would equalise the playing field based on milestones (domestic content, R&D investment, manufacturing capacity). Others argued that “solar manufacturing is a game of scale and given the China challenge, a PLI-like scheme that enables large players is better-suited.”
Trade Analytics — The trade data cannot adjudicate between PLI and RLI designs directly, but it can provide evidence on whether the current policy mix is producing structural change. The HHI data shows concentration increasing, not decreasing, in India’s solar import profile since the PLI was introduced. PC scores for India’s Solar are improving but remain below China, Malaysia, Vietnam, and South Korea. Export growth in processed materials (e.g., backsheets) is visible but not yet in higher-value components.
Synthesis: The trade evidence is consistent with the “scale without capability” critique: PLI has supported large-scale assembly expansion (consistent with export data showing module-related products growing) but the import structure — particularly in equipment and processed inputs — has not changed character. This does not definitively support RLI over PLI, but it does suggest that whatever scheme is chosen, the performance metrics should be tied to import substitution at the capability-intensive stage, not just output volume. The RLI concept of milestone-based conditionality is analytically sound; the question is whether the milestones are set at the right segment (materials, equipment) rather than modules-out.
3.2 R&D funding: the gap is now allocation, not quantum
Industry Roundtable — “The quantum of and access to funding R&D projects used to be a challenge previously, this is not the case anymore.” However, private firms “invest none to limited resources towards research and design.” There is reliance on foreign researchers. Key institutions: NCPRE (IIT-B), IISc. Pilot manufacturing cost-competitiveness is questioned.
Trade Analytics — SHAP feature importance from the NZIPL Predicted Competitiveness model shows that India’s solar PC scores are most strongly predicted by a set of processed-material and equipment HS codes that India currently imports in large quantities. This means the model’s prediction of India’s improving competitiveness is driven by observed trade patterns, not by R&D investment or firm-level capability measures (which are not in the BACI-based model).
Productive tension — The roundtable reveals that the R&D funding barrier has been partially addressed at the public level, but private-sector R&D remains weak. The trade model does not capture R&D at all — it is a trade-pattern model. This means PC scores may overstate India’s near-term competitiveness trajectory if the structural shift to higher-value manufacturing requires R&D investment that is not yet occurring. In other words: the trade data can tell you that India’s solar export basket is improving; it cannot tell you whether that improvement is sustainable or dependent on continued public subsidy without capability formation.
Synthesis: The roundtable’s insight that process innovation occurs on factory floors as much as in labs is important for policy design: R&D support mechanisms that are disconnected from manufacturing processes (e.g., grants to universities with no industry tie-in) will not build the tacit knowledge embedded in production. A CSR-model for R&D, or an RLI scheme with R&D investment milestones, could be more effective than institutional grants alone.
3.3 Next-gen technologies: leapfrog opportunity or distraction?
Industry Roundtable — Participants emphasised perovskite solar cells and tandem cell technologies (>30% efficiency) as potential leapfrog opportunities. Investments in startups at IIT-B focused on cells, BESS, and silver. However, these are at lab/R&D stage, not commercial.
Trade Analytics — The BACI data does not capture perovskite or next-gen solar as a distinct category (no dedicated HS code yet). The trade data for thin-film and specialised solar components (HS 854143, 854190) shows India importing, not exporting, in these segments. SHAP importance analysis for Solar PC suggests conventional silicon-chain products are the dominant predictors of current competitiveness.
Synthesis: The perovskite opportunity is real but carries a classic industrial policy tension: leapfrog bets require accepting that current advantages (established silicon-chain assembly) may be disrupted. The trade data suggests India does not yet have the conventional-silicon capability base that would be the platform for a credible transition to next-gen. The strategic question — whether to build the silicon base first or bet on leapfrog — cannot be answered by trade data alone; it requires technology-timeline analysis. What the trade data does support is that pilot manufacturing capability (the link between lab and scale) is currently weak, consistent with the roundtable finding on pilot cost-competitiveness.
4 Integrated policy pathways
The following pathways integrate evidence from both streams and are grounded in structural realities, not aspirational targets.
4.1 Pathway 1 — Capability-linked conditionality in PLI/ALMM
Rationale: Both sources confirm that existing schemes have expanded assembly scale without inducing proportional capability formation in equipment and materials. PLI metrics tied to output volume do not target the structural gap.
Action: Redesign PLI conditionality to include import substitution milestones for the top 5 deficit categories identified by the trade analytics (production equipment, wafers/glass, encapsulants, metallisation paste, junction boxes). Require progressive domestic content ratios at these specific inputs — not a single blended domestic content percentage — within a 3–5 year glide path. Couple with the ALMM extension to wafers (2028) as the anchor for the upstream segment.
Evidence base: Trade analytics identifies the specific HS codes and the magnitude of import dependence in each segment. Roundtable identifies which items have growing domestic capability (junction boxes) vs. which remain near-zero (silver paste, diamond wire saws). Segment the conditionality accordingly.
4.2 Pathway 2 — Component-level mapping and targeted supplier development
Rationale: The roundtable confirms that policy-relevant components (silver paste, diamond wire saws, junction boxes) are below the resolution of standard trade policy analysis. Relying on aggregate HS data systematically misses these items.
Action: Commission a process-level bill-of-materials mapping for each stage of the solar value chain (cell, module, mounting, balance-of-system), mapped to HS codes and current supplier geographies. Publish as a public tool (extension of the NZIPL Green Dictionary). Use this mapping to identify the 10–15 components where: (a) India is fully import-dependent, (b) domestic market size is sufficient to attract investment, and (c) adjacent manufacturing capabilities exist.
For each identified component, create a targeted supplier development programme — not a generic PLI, but a component-specific programme that includes: domestic content procurement guarantees (via government solar tenders), co-investment in qualifying facilities, and mandatory technology disclosure in any government-supported deal.
4.3 Pathway 3 — R&D architecture reform: factory-floor integration
Rationale: Roundtable confirms public R&D funding barriers have reduced, but private firm R&D is near-zero and academia-industry links are weak. The trade data shows no evidence yet that India’s improving PC trajectory is driven by genuine capability formation.
Action: Establish factory-embedded R&D nodes co-located with PLI-supported manufacturing facilities, on the model of German Fraunhofer institutes. These nodes would be jointly funded by the participating firm, the National R&D fund, and (optionally) the ALMM levy. Their mandate: process innovation, yield improvement, material substitution R&D, and training the next generation of technologists on production equipment. Key institutions (IIT-B NCPRE, IISc) would supply rotating researchers.
Bridge to patents: Rather than purchasing patents as suggested by some roundtable participants, the emphasis should be on defensive freedom-to-operate through understanding of Chinese IP + offensive capability-building through process patents where India has genuine manufacturing insights. Patent purchasing is a rent-extraction strategy; it does not build production capability.
4.4 Pathway 4 — Partner diversification via India’s market leverage
Rationale: Both sources confirm China concentration as the dominant structural risk. India’s deployment scale gives it genuine purchasing power.
Action: Use government solar tender volumes as a procurement instrument. Structure multi-year volume commitments to non-Chinese suppliers (South Korea, Germany, Malaysia, Taiwan) contingent on establishing local manufacturing or co-investment in India. This is not import restriction — it is demand-side industrial policy. The roundtable confirms Chinese boom-bust cycles create periods of vulnerability for Chinese suppliers; India should be positioned to benefit from those moments by having pre-established relationships with alternative suppliers.
Monitoring tool: The CVCE partner HHI tracking can serve as a real-time policy evaluation metric. If the HHI for India’s solar equipment imports does not fall within 3 years of a diversification programme, the programme has not worked.
4.5 Pathway 5 — Circularity and LCOE trajectory preparation
Rationale: Two roundtable themes with long-run implications: (a) the emissions intensity of PV panel production creates a circularity imperative as deployed capacity ages; (b) falling LCOE creates competitive pressure on domestic manufacturers.
Action (circularity): Begin building the regulatory and logistics infrastructure for solar panel recycling now, before the first large wave of decommissioning (projected 2028–2033 for early large-scale installs). This is also an upstream material recovery opportunity: silicon, silver, and aluminium from recycled panels reduce import dependence.
Action (LCOE): The trade data shows that India’s module export prices have been declining (consistent with global LCOE falls). Domestic manufacturers cannot compete with Chinese pricing on commodity modules; the strategic response is differentiation into higher-value products (specialised modules for rooftop, agrivoltaic, BIPV) and downstream services (EPC, O&M, software). Policy should support this transition rather than protect commodity module assembly indefinitely.
5 Limitations and what is missing
| Gap | Industry Roundtable | Trade Analytics |
|---|---|---|
| Sub-HS component detail | Identifies critical items (silver paste, diamond wire saws) | Cannot resolve to sub-HS level |
| Firm-level capability | Confirms design/fabrication gap | ORBIS data partial; no productivity data |
| R&D investment | Confirms private underinvestment | Not captured in BACI model |
| Technology roadmap | Flags perovskite opportunity | BACI has no HS code for emerging techs |
| State-level variation | Mentions MSEDCL, Maharashtra | National aggregates only |
| Geopolitical shocks | Roundtable context is Feb 2026 | Historical BACI data; no forward projection |
A third evidence stream is needed to close the remaining gaps: firm-level manufacturing surveys (productivity, technology vintage, workforce skills, capex plans) combined with the trade and roundtable evidence would provide the full picture required for detailed programme design.
This synthesis was prepared at the Net Zero Industrial Policy Lab (NZIPL), Johns Hopkins SAIS. Sources: NZIPL Industry Roundtable Key Takeaways (February 25, 2026); NZIPL CVCE Trade Analytics (BACI 1995–2024; PC scores; ORBIS). Contact: ovalles1@jhu.edu