India has moved up to become the world’s third-largest country in installed renewable energy capacity, according to a new report by Morgan Stanley, as the country pushes to cut reliance on fossil fuel imports and meet its climate targets.
The report said India’s energy transition will help reduce external dependence in the long term, but its success will hinge on how quickly domestic manufacturing of critical components such as solar cells, wafers, and polysilicon can be scaled up.
Data from the Ministry of New and Renewable Energy, MNRE, shows rapid growth in domestic production. Solar module manufacturing capacity nearly doubled from 38 gigawatts in March 2024 to 74 gigawatts in March 2025. Solar cell capacity also rose sharply, from 9 gigawatts to 25 gigawatts over the same period.
Despite the expansion, India continues to rely heavily on imports for upstream parts of the solar supply chain. In the financial year 2025, the country imported about 35 million solar modules worth approximately 1.6 billion US dollars. The report estimates that 60 to 80 per cent of those imports came from China.
Overall, non-fossil fuel sources now account for more than half of India’s total installed power capacity. Clean energy capacity has crossed 262.7 gigawatts, representing over 50 per cent of the national total. Solar and wind power made up the bulk of new additions.
Morgan Stanley noted that while downstream manufacturing has grown, localizing wafer and polysilicon production remains a key challenge. Building capacity in these segments will be crucial for India to secure its supply chain, lower costs, and meet its renewable energy goals without continued import exposure.
The government has set ambitious targets to expand renewable energy as part of its broader energy security and decarbonization strategy.
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