Finance Ministry Clears a Polysilicon Support Scheme in Principle, Targeting the Last Missing Link in India's Solar Supply Chain

India builds solar modules at gigawatt scale, but every one of them still starts as polysilicon imported from China. That may begin to change. The Finance Ministry has given in-principle approval to a proposal from the Ministry of New and Renewable Energy (MNRE) for a dedicated scheme to support domestic polysilicon manufacturing, Business Standard reported on October 20, 2026. Trade outlets including Solar Bytes and Now.Solar carried the report the following day.

MNRE now plans to take the proposal to the Union Cabinet. An MNRE joint secretary was quoted as saying this should happen within about a month.

What has been approved and what hasn't

The approval is in principle only. The Cabinet still has to sign off, and the scheme's size, structure and eligibility rules have not been made public.

What is known:

• Target: 30 GW of domestic polysilicon capacity by 2030.
• Investment needed: about ₹25,000 crore (roughly $2.6 billion), according to the reports.
• Design: still unsettled. The reports say the scheme could differ from the Production Linked Incentive (PLI) and Approved List of Models and Manufacturers (ALMM) tools used for the rest of the chain. An earlier report described one option under discussion as a capital-expenditure-linked subsidy, but the government has not confirmed this.

MNRE's secretary has previously suggested that the ALMM route, which mandates domestically made modules and cells for many projects, may not work for polysilicon. The companies capable of running chemical-scale polysilicon plants differ from those that turn ingots into modules.

Why polysilicon is the gap

The crystalline-silicon solar chain has five main steps: polysilicon → ingots → wafers → cells → modules. India has added capacity rapidly at the downstream end:

• Business Standard's figures put India's solar module capacity at about 225 GW and cell capacity at about 37 GW. A JM Financial report covered on October 21 expects cell capacity to reach 50 GW by March 2027.
• Mercom India reports that only about 2 GW of ingot and wafer capacity is operational.
• Polysilicon production has not begun. Mercom puts the announced pipeline at around 30 GW, but none of it is producing yet. India currently relies entirely on imports from China for the material.

Polysilicon is also the only stage of the chain with no dedicated support mechanism. Modules, cells, ingots and wafers are all covered by PLI incentives, ALMM mandates, or both. That leaves the most capital-intensive and technically demanding step with no policy support.

Why it is hard to build

Polysilicon is made by refining metallurgical silicon into an ultra-pure feedstock, typically through the chlorosilane-based Siemens process, in which silicon is deposited onto heated rods inside reactors. Plants are large chemical facilities. They need cheap, reliable power, careful handling of hazardous gases, and years of process tuning to reach the purity solar cells need.

China dominates global supply because it has built that scale and cost base over more than a decade. New entrants elsewhere start at a cost disadvantage, which is why India's planners see some form of state support as necessary.

The China factor

Timing adds urgency. JM Financial has noted that China's proposed export restrictions on solar manufacturing technologies could speed up India's push into wafers, cells and ingots. It also warned of short-term disruption for Indian manufacturers that depend on Chinese equipment and know-how.

A supply chain with Indian modules and cells but Chinese polysilicon remains exposed to trade policy decided in Beijing. A domestic polysilicon base, even a partial one, would reduce that exposure for India's power-sector targets.

How it fits the bigger picture

The polysilicon scheme would complete a policy stack built over several years:

1. ALMM List-I created guaranteed demand for domestic modules, and ALMM List-II has extended this to cells.
2. PLI tranches funded integrated module, cell, ingot and wafer capacity.
3. A polysilicon scheme, if approved, would cover the final upstream step.

Polysilicon also matters beyond solar. The same core material, refined to higher purity, underpins semiconductor wafers. That overlap gives the effort a strategic link to India's semiconductor ambitions, although electronic-grade polysilicon is a separate and harder challenge.

What to watch

• Cabinet approval and the final outlay, which will show how much of the roughly ₹25,000 crore investment the state is willing to underwrite.
• The incentive design: a capex subsidy would favour fast plant construction, while output-linked incentives would reward plants that actually run.
• Which companies commit. The companies with announced polysilicon plans now need to move from pipeline to production. Power costs and access to process technology will decide whether a 2030 target of 30 GW is realistic.

Sources

• Business Standard — https://www.business-standard.com/industry/news/finmin-gives-in-principle-nod-to-scheme-for-solar-polysilicon-manufacturing-126102000713_1.html
• Solar Bytes — https://solarbytes.info/india-bytes/mnre-polysilicon-support-scheme-finance-ministry-approval-30-gw-india-12694987
• Now.Solar — https://now.solar/2026/10/21/polysilicon-support-scheme-receives-finmins-in-principle-approval-business-standard/
• Now.Solar (JM Financial on China's curbs) — https://now.solar/2026/10/21/chinas-solar-curbs-may-accelerate-indias-push-for-domestic-wafer-and-cell-manufacturing-report-devdiscourse/
• Mercom India — https://www.mercomindia.com/indias-polysilicon-manufacturing-pipeline-reaches-30-gw-but-production-yet-to-begin
• PV Tech — https://www.pv-tech.org/india-plans-pli-scheme-for-more-than-10gw-polysilicon-capacity/
• ESG Times — https://www.esgtimes.in/esg/regulations/india-considers-subsidy-to-boost-polysilicon-production-for-solar-sector/