India flags misuse of solar tender exemption, may scrap 3–4 GW of projects

India is likely to cancel between 3–4 gigawatts of solar projects after the renewable energy ministry found that several clean energy agencies rushed tender issuances to bypass upcoming import restrictions on solar cells. Starting June 2026, government-backed solar projects must use only locally manufactured modules and cells.

However, a temporary exemption allowed projects with bid deadlines up to August 31 to continue using imported cells - a loophole some agencies allegedly exploited by offering unusually short bidding windows.

According to industry sources, tenders were issued with as little as seven days for bid submissions, enabling developers to lock in cheaper Chinese imports before the rule change. The Indian Solar Manufacturers Association had complained that this was an intentional bid to undercut domestic manufacturing. The ministry has now ordered the agencies involved to cancel and reissue such tenders, giving them 15 days to report compliance.

While India aims to become self-reliant in solar cell production by March 2027, analysts warn that initial ramp-up phases could still see lower effective output. The cancellations may slow deployment in the near term but are expected to reinforce the government’s broader push for domestic manufacturing and reduce dependence on Chinese imports.

Cancelling 3-4 GW of solar projects to enforce localisation-linked import restrictions represents a substantive commitment to domestic solar manufacturing over short-term deployment pace. The 7-day tender window abuse - bypassing the June 2026 domestic-content requirement through hasty issuance - indicates the tension between manufacturers seeking cheaper Chinese imports and PLI-backed domestic producers building capacity.

The March 2027 self-reliance target for solar cell production requires several years of consistent domestic manufacturing scale-up. Interim capacity gaps are inevitable, but enforcement action against loophole exploitation signals that the government prioritises long-term industrial policy over near-term deployment expedience. Domestic producers benefit from the enforcement clarity.

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