Solar Manufacturing Capacity to Surpass 125 GW by 2025, Sparking Overcapacity Worries.

India’s solar module manufacturing capacity is projected to exceed 125 GW by 2025, more than triple the country’s domestic demand of roughly 40 GW, creating a potential inventory surplus of 29 GW, according to research firm Wood Mackenzie.

The rapid expansion has been largely driven by the government’s Production Linked Incentive (PLI) scheme, which has encouraged manufacturers to scale up production at an unprecedented pace.

However, the industry now faces mounting overcapacity risks. Exports, once a key outlet for excess modules, have sharply declined, particularly to the United States. New 50% reciprocal tariffs imposed on Indian solar modules have caused shipments to the U.S. to plummet by 52% in the first half of 2025.

Industry analysts warn that without stronger export avenues or a slowdown in production growth, the sector could be left grappling with a significant inventory glut.