India Emerges as Third-Largest Global Player in Renewable Energy Capacity Amid Rapid Solar Manufacturing Expansion, Import Dependence Persists

India Emerges as Third-Largest Global Player in Renewable Energy Capacity Amid Rapid Solar Manufacturing Expansion, Import Dependence Persists

India has become the third-largest country in global renewable energy capacity as solar manufacturing expands rapidly, according to a Morgan Stanley report. While domestic capacity has grown sharply, heavy reliance on imported solar components, mainly from China, continues. Non-fossil energy now exceeds 50 percent of India’s total installed capacity.

India has secured the position of the third-largest country globally in installed renewable energy capacity, marking a significant milestone in its ongoing energy transition. A new report by Morgan Stanley highlights that India’s shift toward renewable energy is expected to strengthen its external resilience and reduce dependence on foreign energy sources. However, the report emphasizes that the long-term success of this transition will depend on the pace at which India is able to localize critical segments of the solar manufacturing value chain, including solar cells, wafers, and polysilicon.

According to data released by the Ministry of New and Renewable Energy, domestic solar module manufacturing capacity has witnessed a sharp increase, nearly doubling from 38 gigawatts in March 2024 to 74 gigawatts in March 2025. In the same period, solar cell manufacturing capacity has also expanded significantly, rising from 9 gigawatts to 25 gigawatts, reflecting strong domestic industrial growth in the renewable energy sector.

Despite this rapid expansion in manufacturing capability, the report notes that India continues to rely heavily on imports for key upstream components required in solar production. In the financial year 2025, the country imported approximately 35 million solar modules valued at around 1.6 billion United States dollars. An estimated 60 to 80 percent of these imports are believed to have originated from China, underscoring persistent external dependence in the supply chain.

On the broader energy transition front, India’s non-fossil fuel capacity has now crossed 50 percent of total installed capacity, reaching 262.7 gigawatts. Solar and wind energy have accounted for the majority of recent capacity additions, reinforcing their central role in India’s evolving energy mix.

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The report underscores that while India’s renewable energy expansion is accelerating at a strong pace, sustained progress will depend on strengthening domestic manufacturing ecosystems and reducing reliance on imported solar components, particularly in the upstream segments of the supply chain.

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