Waaree Energies' Strategic Moves Shield Solar Exports from US Tariffs
While steep 50% tariffs on Indian solar panel imports threatened to cripple exports to the United States, Waaree Energies executed clever supply-chain strategies to maintain its lucrative trade, even as its main domestic competitor, Adani New Industries Limited (ANIL), saw its exports plummet to zero during the same period.
Supply Chain Agility Versus Vertical Integration
Waaree's management revealed during recent investor calls that the company sourced solar cells from suppliers in Southeast Asia to circumvent the punishing tariffs. Crucially, US tariffs on solar panel imports are determined by the country of origin of the solar cells, not where the panels are assembled. This allowed Waaree to leverage lower tariff rates of 19-20% applicable to countries like Cambodia, Thailand, and Vietnam, compared to the 50% levied on India.
The company further secured its position by operating a panel manufacturing line in the United States, with an annual capacity of 1.6 gigawatts, which runs on imported cells. This dual approach of strategic sourcing and local assembly proved highly effective.
During the December quarter, Waaree sold 275 megawatts worth of locally produced modules and 300 megawatts worth of imported modules in the US market. Overseas sales, predominantly to the US, contributed a significant portion of its revenue, accounting for one-third of its ₹7,565-crore total in the December quarter and nearly half of its ₹6,227-crore revenue in the September quarter.
Lucrative US Market and Pricing Advantage
The financial appeal of the US market for Waaree is clear. The company sells modules in India for ₹18-24 per watt, depending on whether the cells are imported or domestic. In contrast, it earns approximately 28 cents (₹25) per watt in the US, with prices potentially rising to 30 cents (₹27). This premium pricing, even after navigating tariffs, underscores the value of its export strategy.
Amit Paithankar, Chief Executive of Waaree Energies, emphasized the tariff-minimization approach in an October analyst call, stating, "We try to minimize the tariff because if you buy cells from specific geographies, you are actually able to limit the amount of tariff that you need to pay." He also noted that as much as 65% of Waaree's massive ₹60,000-crore order book was from overseas markets.
Adani's Export Challenges and Domestic Focus
In stark contrast, exports by Adani New Industries Limited dropped to zero in the December quarter, following a sharp decline in the previous quarter. Data shows the company sold 997 megawatts worth of solar modules during that period, entirely within the Indian market. This marks a significant shift from earlier quarters where exports constituted 50-60% of its sales volume.
ANIL's different business model contributed to this outcome. The company relies mainly on solar cells produced in-house at its facilities in Mundra, Gujarat, with 4 gigawatts of integrated cell and module manufacturing capacity. While this vertical integration provides cost advantages, it offers less flexibility in cell sourcing compared to Waaree, which has 21.2 gigawatts of module capacity but only 5.4 gigawatts of cell manufacturing capacity in India, necessitating significant cell imports.
An executive familiar with Adani's situation, who requested anonymity, indicated that the pause in US exports was temporary and followed discussions with American clients. With the recent India-US trade agreement lowering tariffs on India to a more competitive 18%, the company is expected to resume exports soon.
Analyst Perspectives and Market Dynamics
Harshraj Aggarwal, Executive Vice President of Institutional Equity Research at Yes Securities, observed, "Even after tariffs, US orders came for Waaree Energies and their realisations have also gone up. The company benefitted from having module assembly plants in the US and also from possibly sourcing cells from Southeast Asian countries with lower tariffs than India." He suggested that Adani's export drop could be attributed to tariffs or higher domestic demand.
Credit rating agency ICRA noted in a December report that ANIL's revenue and profitability growth were slightly affected in the first half of FY2026 due to moderating sales realizations from increased competition and US tariff impacts. However, they indicated that ANIL's backward-integrated operations, captive demand within Adani Green Energies Ltd, and strong domestic market position could provide some insulation from long-term headwinds.
Broader Industry Implications and Future Outlook
The tariff episode offers valuable insights into how companies navigated significant business disruptions. While solar-panel exports are now expected to normalize with the improved trade terms, Waaree's experience demonstrates how perceived shortcomings can be transformed into opportunities through strategic adaptation.
Other Indian solar panel manufacturers are cautiously exploring the US market. Vikram Solar Ltd has considered sourcing cells from lower-tariff countries for US exports, with 16% of its order book from overseas, though exports haven't yet commenced. Premier Energies Ltd put its US expansion plans on hold due to tariff uncertainty.
Rinal Shah, General Manager of Corporate Finance at Vikram Solar, explained the complexity during a January investor call, noting that Indian cells became unviable for US exports due to reciprocal tariffs. He emphasized the need to establish supply chains compliant with US regulations like the Uyghur Forced Labor Prevention Act (UFLPA) and restrictions on Foreign Entities of Concern (FEOC), requiring pre-approval from US Customs and Border Protection.
As the renewable energy sector continues to evolve, the contrasting approaches of Waaree Energies and Adani New Industries highlight the critical importance of supply chain flexibility and strategic planning in navigating international trade barriers and capitalizing on global market opportunities.
