The proposal would extend local sourcing requirements across the entire solar manufacturing chain, reinforcing earlier rules that already require the use of locally assembled solar panels in state-run projects.

Under current regulations, companies must use domestically produced solar panels, though key upstream components such as cells, wafers, ingots and polysilicon can still be imported. The new proposal seeks to close that gap by mandating local production of critical inputs.

India has already directed firms to use domestically manufactured solar cells starting June 2026, marking a phased approach toward building a fully integrated domestic supply chain.

Major energy firms including Waaree Energies, Tata Power and Indosol Solar have announced plans to invest billions of rupees to expand manufacturing capacity, aligning with policy signals favoring local production.

The push comes as India targets 500 gigawatts of non-fossil fuel-based power capacity by 2030, a goal that requires rapid scaling of solar installations alongside domestic industrial capability.

India currently depends heavily on China for imports of key solar components, including cells, wafers, ingots and polysilicon. The proposed mandate is expected to reduce that dependence while strengthening domestic manufacturing resilience.

The policy reflects a broader strategy to secure supply chains and support local industry as global competition in renewable energy technologies intensifies.

Members of the party’s Middle East crisis economic response task force said the measures aim to stabilise domestic energy supply and prices as shipments of oil and gas to South Korea have been disrupted by the regional conflict affecting the vital maritime corridor.

According to data from the Korea International Trade Association, South Korea depends heavily on energy imports, sourcing about 70% of its crude oil and roughly 20% of its liquefied natural gas (LNG) from the Middle East.

Democratic Party lawmaker Ahn Do-geol said the government would prioritise managing LNG supplies by increasing electricity production from coal and nuclear facilities while scaling back reliance on LNG-fired power generation.

Limits that capped coal power output at 80% of installed capacity will be lifted starting Monday, Ahn said. Maintenance work at six nuclear reactors will also be completed earlier than scheduled to raise the utilisation rate of nuclear plants from the high-60% range to about 80%.

The government on Friday introduced a price ceiling on gasoline of 1,724 won ($1.15) per litre, with adjustments planned every two weeks to reflect changes in global oil markets.

Ahn said gasoline and diesel prices had already declined since the cap was introduced, falling by 58 won and 77 won per litre respectively as of Sunday.

Officials said a supplementary budget would be drafted by the end of the month and submitted to parliament to cushion the economic impact of higher energy costs.

Democratic Party leader Jung Chung-rae said the party would fast-track approval of the budget within 10 days after it is submitted. The proposed spending package is expected to include compensation for refiners linked to the fuel price cap, energy vouchers for households, logistics support for exporters and expanded investment in renewable energy.

The Budget Ministry said no specific date had yet been set for the supplementary budget but that preparations were underway.

Authorities are also considering designating the Yeosu Petrochemical Complex as a special industrial crisis response zone as part of efforts to support industries affected by the energy disruption.