The Ministry of New and Renewable Energy on Sunday (December 7, 2025) said it had not issued any advisory to pause or halt new financing for the sector.

The clarification came after Reuters reported on Friday (December 5) that the Ministry had urged lenders to proceed slowly in financing new solar module plants because supply had exceeded demand.

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The New And Renewable Energy Ministry’s letter rattled solar manufacturers in the country, with many raising concerns that the move could choke financing for the entire sector.

On Sunday (December 7), the Ministry said that it had asked the Finance Ministry to advise lenders to adopt a “calibrated and well-informed approach” when evaluating proposals for additional standalone solar photovoltaic module capacity, citing oversupply risks. It added that the advisory was not intended to stop funding for the entire clean energy sector.

“This broad-based caution, if applied without distinction, could hurt solar cell manufacturing,” said Chetan Shah, the chairman and managing director of Solex Energy.

“Restricting financing now will disrupt under-construction projects and deepen reliance on imported cells,” he said.

Several firms ramped up module production in recent years, betting on exports to the U.S. But higher American tariffs and tighter scrutiny of Indian shipments for Chinese-origin components have hit exports, raising fears of a glut at home.

India’s module capacity is projected to surge by a third to 200 gigawatts (GW) in the next few years, while cell output could quadruple to 100 GW, according to the Ministry.

The Ministry remained committed to strengthening solar manufacturing through policy support and infrastructure development, it said on Sunday (December 7).