India has rolled out a series of incentive policies to promote local PV manufacturing. Among them, the ALMM (Approved List of Models and Manufacturers) component list stipulates that government projects must use local components on the list. For the Indian market, which relies heavily on government projects for installations, ALMM not only incentivizes local production capacity but also gradually shifts India’s dependence on imported components, exerting a profound impact on the local PV supply chain.
As the ALMM component list was reintroduced in April 2024, a surge in inventory before the policy deadline drove up component imports. According to Infolink’s estimates, India imported approximately 16.5 GW of components in the first three quarters of 2024, with the first quarter alone accounting for 11 GW, the high point for the year. However, after the implementation of the component list, only a small number of Indian government projects, such as those for PV-powered hydrogen production, or private projects can use foreign components, resulting in a decline in component imports to about 1.9 GW in the second quarter, a decrease of 83% from the previous quarter.
In contrast to the decline in component imports, India’s battery imports hit a new high in the first three quarters of 2024, totaling approximately 29.5 GW. This significantly exceeds the 18.1 GW imported in the entire year of 2023 and continues to grow after the implementation of the ALMM component list. Battery imports in the third quarter of 2024 increased by about 18% and 36% compared to the second and first quarters, respectively.
Impact of ALMM Policy on India’s PV Supply Chain
It’s worth noting that although the Indian government has opened the ALMM component list to foreign suppliers, the list published in early December 2024 shows that all 62.8 GW of compliant component capacity is locally manufactured in India. Among the manufacturers, only FS Solar India, the Indian subsidiary of First Solar, has a foreign background. This may indicate that foreign manufacturers need to establish companies in India and achieve local manufacturing to enter the list, while the possibility of non-Indian capacity being included in the list is relatively pessimistic.
Furthermore, as of the third quarter of 2024, India’s local component capacity has reached 65.8 GW, but battery capacity is only 13.2 GW. Due to inadequate technical reserves among local battery manufacturers and the longer production cycles in the battery sector, India’s local battery capacity is unlikely to match the rapid growth of local component capacity in the short term. The differing trends in component and battery import data also reveal that with the implementation of the ALMM component list, local component manufacturers still rely on imported batteries to address the immediate mismatch between supply and demand. India is gradually transforming into a market driven by battery demand.
Will the Introduction of ALMM Battery List in 2026 Trigger Another Change in India’s PV Industry?
Following the implementation of the component list, the Indian government has also announced that it will implement the ALMM battery list in April 2026, stipulating that manufacturers on the component list must also use local batteries from the battery list in the future. This means that government projects will require the use of local components assembled with local batteries.
Assuming the ALMM battery list is implemented as scheduled in 2026, India’s demand for imported batteries may follow the declining trend of component imports in 2024. However, considering that the Indian government suspended the implementation of ALMM in 2023 due to insufficient component capacity, it is speculated that when introducing the battery list, the Indian government will still decide whether to implement the policy based on the landing of battery capacity.
In summary, 2025 will be a critical window period for the implementation of the ALMM battery list. Whether India’s battery capacity can keep pace with the growth rate of the component side will determine the subsequent direction of the policy. However, in the long run, as India has been committed to energy transformation in recent years and the government is actively promoting local manufacturing, the implementation of the ALMM policy will inevitably significantly reduce India’s future dependence on imports of downstream PV products and promote the global PV supply chain towards a new market landscape.
