The implementation of ALMM for solar PV cells from June 2026 has also fast tracked the expansion of cell manufacturing capacity in India, which is likely to increase to about 100 GW by December 2027 from 17.9 GW currently under ALMM. While this is positive for solar OEMs, the cost of domestic modules using cells from domestic OEMs is likely to exceed the cost of modules using imported cells by 3-4 cents/watt.

The annual solar module production is expected to be higher than the projected annual solar capacity installation of 45-50 gigawatt direct current (GWdc). Further, the recent imposition of US tariffs has redirected modules from the export market to the domestic market. Hence, the overcapacity in module production will likely lead to consolidation of smaller/pureplay module players. However, the vertically integrated manufacturers will benefit over the long term due to greater control over the supply chain.

Exhibit: Trends in module manufacturing capacity under ALMM

Source: ICRA Research, MNRE