Critically examine the effectiveness of Production Linked Incentive (PLI) schemes in building a fully integrated domestic solar PV supply chain in India.

The PLI Scheme for the National Programme on High Efficiency Solar PV Modules, with an outlay of ₹24,000 crore across two tranches, was designed to create GW-scale capacity across the full chain — polysilicon → ingot/wafer → cell → module — segments then largely absent in India [1][2]. Its record is one of strong downstream success but unfinished upstream integration.

Achievements

• Scale created: Letters of Award covering 48.3 GW of fully or partially integrated module capacity are under implementation, drawing investment of about ₹1.1 lakh crore and around 45,000 direct jobs [3].
• Manufacturing deepening: ALMM List-I capacity grew from 8.2 GW in 2021 to about 172 GW, and cell capacity under ALMM List-II crossed 27 GW within seven months of its introduction [4].
• Policy complementarity: PLI's supply-side incentive is reinforced by ALMM's demand-side mandate, giving manufacturers assured offtake — a design lesson for other PLI sectors [4].
• Energy security: it directly serves the 500 GW non-fossil capacity target for 2030 by insulating deployment from import shocks [4].

Limitations

• Upstream gap persists: wafer and polysilicon capacity remains minimal; India still imports the bulk of wafers and a large share of cells, so "integration" is largely cell-and-module deep [1][5].
• Selective absorption: bidders gravitate to lower-capex module lines rather than energy- and capital-intensive polysilicon, showing that a production-linked payout poorly suits segments where the barrier is upfront capital [1].
• Overlapping architecture: capex support for polysilicon and wafers sits under SPECS (25% capex incentive) administered separately, diluting a single-window push [6].
• Timeline risk: ALMM for ingots and wafers takes effect only from 1 June 2028, leaving a multi-year window of continued dependence [4].

PLI has therefore succeeded in ending module dependence but not yet in achieving true vertical integration. Pairing production-linked payouts with capex-linked support for polysilicon, alongside the phased ALMM roadmap and predictable offtake, can complete the chain — turning Atmanirbhar Bharat in solar from assembly-led to material-led self-reliance.