India's ALCM Deadline: A Make-or-Break Moment for Solar Manufacturing?

Come June 1, 2026, India's solar sector faces a watershed moment. Under the ALCM — the Approved List of Cells and Manufacturers, effectively ALMM List-II — modules deployed in most categories of solar projects in the country must use solar cells sourced from domestically approved manufacturers. It is the most ambitious step yet in India's push to build a fully integrated solar supply chain, moving beyond modules to cells, and potentially wafers next.

The stakes are considerable. When MNRE published its first ALCM list in July 2025, only six manufacturers were enlisted, with a total listed capacity of roughly 13 GW — a fraction of the 91.5 GW of module capacity already on ALMM List-I.  That gap has widened to about 150 GW of module capacity and under 30 GW of cell capacity now. Making it the crux of the problem. India has become a module manufacturing powerhouse, but cell production has lagged, leaving the country still heavily dependent on Chinese cells embedded in domestically assembled modules.

While research firms have warned of the risks to project implementation from shortage of domestic cells, besides the inevitable rise in power tariffs, for smaller developers and EPC firms without locked-in supply arrangements, this is an existential concern.

If the deadline holds, the winners are clear: large, vertically integrated manufacturers who have already invested in cell capacity will enjoy captive demand and pricing power, potentially for years. Competitors relying on imported cells will either scramble to comply, pay a steep premium, or exit certain market segments altogether.

The Extension Debate

While this writer has heard many voices hoping for an extension, or talk about sources tell them it will happen, the big question in everyone's mind is how long? Most of the small module players in the 500 MW to 1.5 GW range stress that even a six month extention will not be enough. Some have arguied for a deferral of as long as two years. Something we believe can't happen. Larger players who do have cell making capacities up and running on the other hand, continue to say that the issue has been blown up. While admitting that domestic cells cannot compete with Chinese prices, they point to a pipeline of new capacities coming in. One firm even pointed to how US tariff actions will drive many exporters to focus on the domestic market for now, improving the supply situation. 
When we asked a small player on the worst case scenario of no extension, the representative claimed orders would stop by April, and perhaps factorioes would shut as well in many cases. Others pointed to the many challenges faced by firms in operationalising and stabilising cell production, something the government didnot anticipate in their view. 

While soma eplayers have built stregths in the exempt Distributed Renewable Energy (DRE) segment to sell, others are hoping that a long extension will open up opportunities in the first of many green hydrogen linked projects, which are also exempt. 

Government Options

For the government, there is little doubt that solar manufacturing growth has been a poster child of its sustained efforts to support Make in India. Protection here has managed to delivber a thriving sector that has generated jobs, and finally cut down the value of imports as well. The solar policy of the past 5 years is littered by schemes to stimulate demand, policy tweaks (ALMM itself was postponed twice ) and flexible deadlines, thanks to the sheer pace of change in the sector as well as evolving options like funds availability.  However, it has reasons to be a little aggrieved at the delay in cell capacities coming up, versus what was told to it by the industry majors until as recently as the middle of last year.

 Commissioning delays have been caused by multiple factors, including those attributable directly to the government itself like Visa delays for Chinese experts. Others like delay in machinery imports from China, lack of skilled manpower,  and high manufacturing complexity have also stumped many promoters. Thus, it will certainly not be unprecedented to extend. However, a postponement of over a year seems impossible, as that would send the wrong signals at many fronts, especially admitting that manufacturers have simply made commitments while knowing about delays.   
Not extending the deadline anymore on the other hand, will certainly benefit the few players that do have their own cells, and lead to some consolidation as well. Many smaller players are already realising that the easy margins are going away, and looking to exit. And of course, they always have the middle path, of not extending the deadline, but offering some leeway in the form of exemption to a a specific segment like say, C&I, that would allow more players to withstand the transition period. 
What is important perhaps is that they move quickly, as uncertainty on future government actions is beginning to impact decision making on the ground right now.