India is becoming a destination for clean energy manufacturing, driven by three forces: government incentives, a massive home market for renewable energy, and global companies moving away from China. Solar panel makers, wind turbine manufacturers, and electric vehicle component producers are setting up factories across the country, creating jobs and reducing India’s dependence on imports.
The Production Linked Incentive scheme, or PLI, is the primary tool. The government offers cash rewards to companies that manufacture solar equipment, batteries, and EV parts in India rather than import them. Companies like Adani, Reliance, and Waaree have announced major solar manufacturing plants. Several international firms, including those from South Korea and Japan, are also investing. The domestic renewable energy market is a key pull factor. India aims to install 500 gigawatts of renewable energy by 2030, one of the world’s most ambitious targets. This huge demand gives manufacturers a guaranteed customer base, making investments more attractive.
However, India’s cleantech manufacturing base remains incomplete. Battery production, which is crucial for electric vehicles and energy storage, is still underdeveloped. Most lithium-ion battery cells used in Indian EVs are imported from China, South Korea, and Japan. Similarly, upstream solar components like silicon wafers and polysilicon, the raw materials that solar panels are made from, are not yet produced at scale in India. This means the country is manufacturing finished products but remains dependent on imports for critical inputs.
Global supply chain shifts are accelerating this opportunity. Western countries and Japan are actively pushing companies to move manufacturing out of China to reduce geopolitical risk. India’s large workforce, improving manufacturing infrastructure, and trade agreements with countries like the US make it an attractive alternative destination. This is different from past manufacturing booms driven only by labour costs. Companies are willing to accept slightly higher costs if it means reducing reliance on a single country.
The impact is already visible. Solar manufacturing capacity is expanding rapidly, with multiple gigawatts of new capacity announced for the next two to three years. EV component makers are setting up supply chains across Tamil Nadu, Gujarat, and Maharashtra. Employment in cleantech manufacturing is rising, though exact numbers remain scattered across different reports.
What happens next depends on whether India can close the battery and upstream solar gaps. Without domestic battery production, India will struggle to become a true hub for EV manufacturing. Without polysilicon production, solar panel makers will remain vulnerable to global price shocks and supply disruptions. The government recognizes this and is drafting incentive schemes for battery cell manufacturing and advanced materials. Whether these schemes translate into actual factory investments within the next two years will determine if India’s cleantech manufacturing boom is sustainable or a temporary wave.
