New report shows India’s potential as manufacturing hub for solar DRE products

Experts state that reliable supply chains, shorter lead times and greater policy support are giving India increasing competitive advantages as a manufacturing hub

New Delhi, 6 September 2022

A new report shows that India has become a more competitive place for the manufacturing of solar  distributed renewable energy (DRE) products such as solar lighting systems and solar water pumps. This is due to both, an improving enabling environment in India, and COVID-19 pandemic related supply chain disruptions, which have increased the cost and shipment time of imports. Between 2019-20 and 2021-22, there has been an estimated five time increase in freight costs for solar modules imported from China. 

The study ‘Transforming India into a Global Solar DRE Manufacturing Hub: A Study into Market Requirements and Readiness’ published by GOGLA, the global association for the off-grid solar industry and Intellecap, and supported by Good Energies Foundation, dives into the potential opportunities to scale domestic manufacturing in India, while also making recommendations to address challenges and constraints identified, holding back this growth. The study proposes a strategic roadmap for the development of a robust solar DRE value chain in India.

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Presentation of the study ‘Transforming India into a Global Solar DRE Manufacturing Hub: A Study into Market Requirements and Readiness’ on September 6th.

According to the report, solar panel manufacturing in India has already been increasing due to support from initiatives such as ‘Make in India’ and ‘Production-linked Incentives’, with several products and core components  being now manufactured in India, for both domestic and export markets. Experts also state that reliable supply chains, shorter lead times and greater policy support are giving India increasing competitive advantages and present opportunities for the country to grow as a manufacturing hub.

Futurepump - India factory building.JPG
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Futurepump - India factory building.JPG

Futurepump's India Factory Building. Credit: Futurepump.

However the report notes that protecting consumers and maintaining consumer confidence in solar products remains imperative for the sector. Many solar DRE products available in the Indian market today are manufactured from low cost components of  uncertain quality and sourced from informal enterprises without adequate capacity to implement and follow quality standards in their production processes. 

The study advises that it is crucial to provide support to informal manufacturers in terms of technological know-how, subsidies on equipment, personnel training to help them produce better quality products without a significant increase in costs.

Futurepump - Factory India SBD_6476.JPG
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Futurepump - Factory India SBD_6476.JPG

Futurepump's India Factory Team. Credit: Futurepump

Some other key recommendations:

  • To maximise on the potential for domestic manufacturing, India should position itself as a global hub for the manufacture/assembly of DRE products and enhance efforts to cater to the large South-Asian, Pacific, and African markets.

To compete within the global market, India must be cost-competitive with other countries that manufacture DRE. Activities to support local production should consider the relative cost competitiveness of India with its competitors in different DRE technology and component segments and provide a tailored approach to attaining global competitiveness to serve price sensitive markets.

  • DRE companies already manufacture some components or products in India, but a concerted package of support focussed on the assembly of final products and key intermediary components is needed to create a step-change in activity and capitalise on this opportunity.

A staged approach, focused on growing domestic demand, whilst building the foundations for local manufacturing, would ensure that the positive impacts of the sector are heightened whilst the base for local manufacturing is expanded.

  • The manufacturing of batteries for DRE in India could present an opportunity due to the increasing focus on this technology by the government through its various initiatives. 

  • Limited term tax reductions could play a key role within a staged approach, as heightened Basic Customs Duty (BCD) on imported solar cells to 25% and modules to 40% have made them more expensive. 

BCDs are currently raising the costs and reducing affordability of DRE products including of domestically manufactured products that rely on various imported components. 


Solar DRE manufacturing in India deserves the spotlight, as it is the sector for the future and India with its large domestic consumer base and strategic position on the global trade routes, is well suited for it. This report is an attempt to highlight some of those opportunities, challenges and proposed solutions. Praviin Kumar, South Asia Regional Representative, GOGLA

This report released is with the support of PowerForAll.


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