India's Non-Fossil Fuel Capacity and PLI Schemes
India aims to install 500 GW of non-fossil fuel capacity by 2030, driven primarily by the Production Linked Incentive (PLI) schemes. While the scheme has succeeded in some areas, such as telecom manufacturing, challenges remain in solar photovoltaics and battery storage.
Challenges in Solar Photovoltaics
- Downstream module assembly has achieved 56% of its target by mid-2025.
- Critical upstream segments such as polysilicon and wafer manufacturing have reached only 14% and 10% of targets, respectively.
- This highlights ongoing reliance on imported raw materials and specialized expertise.
- The government is considering additional capital subsidies to address these bottlenecks.
Battery Manufacturing Struggles
- The goal is 50 GWh of domestic battery cell production with an outlay of ₹18,000 crore.
- By late 2025, only 1.4 GWh (2.8% of the target) had been commissioned.
- Challenges include stringent domestic value addition requirements and technical barriers of gigafactory construction.
- Complications include visa issues for Chinese technical experts.
Technological and Policy Implications
- The expectation that capital support alone will enhance high-tech manufacturing is overly optimistic.
- Complex infrastructure requires decades of research and workforce training.
- International technology transfers are capital intensive and may not yield immediate benefits.
- Several companies face penalties for not meeting deadlines.
There's a need to re-evaluate PLI scheme provisions to prioritize technical expertise over the financial strength of companies applying for contracts.
