The crisis stems from a government requirement that forces solar module makers to source cells exclusively from local producers. Industry leaders previously warned that domestic manufacturing capacity, currently at 27 GW, is insufficient to meet the demand of the 200 GW module sector. With Chinese imports—which previously supplied over 90% of the market—effectively blocked, a supply gap of roughly 2.6 GW annually has paralyzed production lines.

One manufacturer reported that the lack of available cells over the last three months will likely slash their module output from 3.2 GW to just 1 GW. These disruptions jeopardize India’s broader energy transition, which aims to reach 500 GW of non-hydrocarbon generation capacity by 2030. With solar projects accounting for 29% of this target, the current supply bottleneck creates a significant hurdle for the country's plan to expand its solar footprint from 162 GW to over 292 GW by the end of the decade.