Domestic Supply Chains & Data Centres Mandated

India’s wind energy sector faces a fundamental transformation following new regulations that came into effect July 31, 2025, requiring all wind turbine manufacturers to establish domestic supply chains and data centres within the country. The policy aims to dramatically increase manufacturing capacity utilisation from the current 25-30 per cent to an ambitious 70-80 per cent while addressing national security concerns over foreign-controlled energy infrastructure.

The Ministry of New and Renewable Energy has renamed the Revised List of Models and Manufacturers (RLMM) to the Approved List of Models and Manufacturers (ALMM) Wind, introducing comprehensive requirements that mandate wind turbine manufacturers source all key components—including blades, towers, gearboxes, generators, and special bearings—exclusively from approved domestic suppliers. These components represent 65-70 per cent of a wind turbine’s total cost, making the mandate particularly significant for market dynamics.

The regulations directly target the competitive imbalance that has emerged over recent years, as Chinese manufacturers expanded their market share from just 10 per cent in fiscal 2019 to approximately 45 per cent in fiscal 2025, as per CRISIL ratings. Chinese original equipment manufacturers achieved this growth by importing lower-cost components from China, making their products 10-15 per cent cheaper than Indian manufacturers and creating what industry officials describe as an uneven playing field.

Under the new framework, all wind turbine manufacturers must establish research and development centres in India within one year, ensuring turbines are designed specifically for Indian conditions including low wind speeds and high temperatures. The requirement addresses historical operational issues such as turbines tripping due to extreme weather conditions in states like Rajasthan, where foreign-designed equipment has struggled with local environmental challenges.

Cyber security considerations feature prominently in the policy shift, with regulations mandating that all wind turbine data must be stored within India. The policy prohibits real-time operational data transfers abroad and requires operational control to be conducted exclusively from facilities located within the country. These measures respond to national security concerns highlighted by National Security Advisor, Ajit Doval and in a NITI Aayog report, which identified risks associated with foreign-controlled data collection servers and unauthorised software updates in critical energy infrastructure.

The policy particularly benefits Indian manufacturers like the Suzlon Group, which holds a 31 per cent market share in India’s installed wind capacity and already sources most components domestically while maintaining established research and development facilities within the country. Other domestic players including Inox Wind are similarly positioned to capture increased market share as the cost advantage of Chinese competitors diminishes under the new sourcing requirements.

Chinese manufacturers, particularly Envision Group, face substantial adjustment costs as they must now establish local supply chains and data centres, potentially eroding their historical cost advantages. However, some companies have already begun adapting to the changing landscape, with Envision Energy relocating its data control centre from China to India in late 2024 in anticipation of the regulatory changes.

India’s wind manufacturing sector, which has already achieved over 20 gigawatts of annual manufacturing capacity, currently operates at significantly underutilised levels, with only 4.15 gigawatts installed in FY 2024-25. Industry analysts project this underutilisation will improve dramatically under the new regulations, with capacity utilisation expected to reach 70 per cent as domestic demand increases and foreign manufacturers establish local operations.

Quality enhancement is another important part of the regulatory framework, with Bureau of Indian Standards (BIS) certification becoming mandatory from September 2026. Under the broader Machinery and Electrical Equipment Safety regulations, this certification will ensure that all wind turbine components meet strict safety and performance standards across the industry. It will help avoid delays, non-conformance, and recalls, promote technical accountability among both Indian and foreign manufacturers serving the Indian market, and reduce the risk of equipment failure, recalls, or rejection at Indian ports.

The policy includes pragmatic transition provisions to protect existing investments, exempting projects already bid out before July 31, 2025, if commissioned within three years. Captive, open access, commercial and industrial projects, and third-party sale projects scheduled for commissioning within 18 months also receive exemptions. Additionally, new manufacturers and models receive exemptions for 800 megawatts capacity over two years to promote innovative technologies and performance efficiencies not available indigenously, ensuring the policy doesn’t stifle technological advancement.

Long-term projections suggest the policy positions India to capture 10 per cent of global wind equipment demand by 2030, leveraging comparatively low manufacturing costs and strategic geographical location near emerging markets in Asia, Africa, and the Middle East. With global wind installations needing to reach 320 gigawatts annually to meet climate targets, India’s enhanced manufacturing capacity could serve both domestic and export markets.

Industry analysts project India’s annual wind capacity additions will more than double to 7.1 gigawatts on average over the next two financial years, compared to 3.4 gigawatts during 2023-2025, as the combination of policy support, improved cost structures, and enhanced domestic manufacturing capabilities.

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