Indian budget offers boost to domestic PV manufacturing

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Domestic PV manufacturing in India is to receive additional support set out in the country’s Union Budget. Image: Alpex Solar.

PV Industry figures in India have welcomed government proposals to boost the country’s domestic solar and clean energy manufacturing sector.

Setting out India’s Union Budget for 2025-25 on Saturday, finance minister Nirmala Sitharaman announced a ‘National Manufacturing Mission’ that will provide support for the local production of clean energy technologies.

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Sitharaman said the mission would help build the “ecosystem” for manufacturing of solar PV cells, electric vehicle and grid-scale batteries, wind turbines and other clean energy technologies.

“Our government will set up a National Manufacturing Mission covering small, medium and large industries for furthering ‘Make in India’ by providing policy support, execution roadmaps, governance and monitoring framework for central ministries and states” the minister said.

The budget also outlined reductions on basic customs duties (BCD) for solar cell and module imports into India. BCD for cells will be reduced from 25% to 20% and for modules from 40% to 20%, although both these reductions will be offset by increases in other levies, meaning the net impact on cell and module prices will be minimal.

The budget also set out plans for reforms to India’s power sector.

Among these, the government said it would incentivise electricity distribution reforms and augmentation of intra-state transmission capacity by states with the aim of improving the financial health and capacity of electricity companies. Additional borrowing of 0.5% cent of GSDP will be allowed to states, contingent on these reforms.

Neerav Nanavaty, CEO of BluPine Energy, welcomed the emphasis on local manufacturing.

“The budget lays out a bold and pragmatic roadmap for India’s clean energy future. The focus on boosting domestic manufacturing of EV batteries, solar panels, and other clean tech components will strengthen our supply chains and reduce import dependencies.

“Power sector reforms, particularly incentives for distribution companies and intra-state transmission upgrades, will further improve grid efficiency and financial viability. The Nuclear Energy Mission, with its ambitious 100 GW target and support for Small Modular Reactors, shows a strong commitment to diversifying the country’s energy mix. These initiatives not only complement our current efforts but also open new avenues for growth.”

Sumant Sinha, CEO of leading Indian renewable energy company, ReNew Power, said:”The Union Budget 2025 is a prudent plan that aligns with India’s immediate need for consumption boost and medium-term focus on enhancing manufacturing competitiveness. It accelerates the clean energy transition with strong support for clean tech manufacturing and nuclear energy. The National Manufacturing Mission and adjusted duties on batteries are key steps toward strengthening domestic clean energy manufacturing. Additionally, the target of 10,000 fellowships for research, including clean tech, positions India to lead in sustainable energy while boosting both economic and environmental resilience.”

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