Context:
India’s Production Linked Incentive (PLI) scheme, aimed at achieving 500 GW non-fossil fuel capacity by 2030, faces structural and technological hurdles in solar photovoltaic (PV) and Advanced Chemistry Cell (ACC) battery manufacturing.
Key Highlights:
- Solar Manufacturing Gaps
- Downstream module assembly achieved 56% of target (mid-2025).
- Upstream segments lag:
- Polysilicon – 14% of target
- Wafers – 10% of target
- Continued dependence on imported raw materials and technical expertise.
- Battery Manufacturing Delays
- Only 1.4 GWh commissioned out of 50 GWh target (late 2025).
- Domestic Value Addition (DVA) norms:
- 25% in 2 years
- 60% in 5 years
- Visa issues for technical experts affecting gigafactory operations.
- Policy Response
- Consideration of additional capital subsidies for high-capex upstream solar projects.
- Debate over prioritizing technical expertise over financial net worth in PLI allocation.
Relevant Prelims Points:
- Production Linked Incentive (PLI): Performance-based incentive to boost domestic manufacturing.
- Polysilicon: High-purity silicon used in solar cells.
- Photovoltaics (PV): Conversion of sunlight into electricity via semiconductors.
- Advanced Chemistry Cell (ACC): Next-gen batteries for EVs and storage.
- Gigafactory: Large-scale battery manufacturing facility.
- India’s target: 500 GW non-fossil capacity by 2030.
Relevant Mains Points:
- Structural Constraints
- Weak upstream ecosystem.
- Technology-intensive segments require decades of R&D investment.
- Infrastructure gaps in supply chains.
- Over-Reliance on Capital Subsidy
- Financial incentives alone cannot create technological capability.
- Need for skilled workforce development and innovation ecosystems.
- Strategic Concerns
- Continued import dependence undermines energy security.
- Risk of missing climate targets.
- Governance Issues
- Stringent DVA norms may deter investment.
- Implementation gaps across ministries.
Way Forward
- Invest in R&D and skill development ecosystems.
- Strategic technology partnerships.
- Gradual relaxation with phased DVA compliance.
- Strengthen upstream manufacturing clusters.
UPSC Relevance:
- GS 3: Economy – Industrial policy
- GS 3: Science & Technology – Clean energy manufacturing
- GS 2: Governance – Policy implementation challenges