US Proposes Heavy 125.9% Duty on Indian Solar Cells, Jeopardizing $1.2 Billion Export Market
In a significant development impacting India's renewable energy sector, the United States Commerce Department has proposed imposing countervailing duties of 125.9% on crystalline silicon photovoltaic cells imported from India. This preliminary finding, which cites alleged subsidies, directly targets shipments to the US market—a destination that absorbs over 95% of India's solar cell and module exports.
Potential Wipeout of Cost Advantage and Market Viability
The proposed duty is expected to completely eliminate the cost advantage that Indian suppliers have traditionally held over US-made modules, which themselves rely heavily on imported cells. According to trade research body GTRI, India exported solar panels worth $1.2 billion to the US, representing an 18% decline compared to 2024 figures. "At this rate, a $100 panel could land in the US at approximately $226, rendering many existing contracts commercially unviable," the organization stated.
Crisil Intelligence director Sehul Bhatt provided additional context, noting that between April 2023 and November 2025, India exported cells and modules worth roughly Rs 340 billion to the United States. "Modules from India could become at least 30% more expensive compared with US-made alternatives, making them economically unsustainable for American buyers," Bhatt emphasized.
Major Exporters Facing Uncertainty
The preliminary finding affects several prominent Indian solar equipment exporters to the US market, including:
- Waree Energies
- Vikram Solar
- Premier Energies
- Mundra Solar Energy
- Mundra Solar PV
Abhishek Pareek, Group Head of Finance at Waaree Energies, indicated that while the matter remains under review, the company does not anticipate a material impact on its ability to service its US order book. "We are proactively expanding local manufacturing in the United States and diversifying our supply chain to mitigate potential disruptions," Pareek explained.
Meanwhile, Emmvee Photovoltaic Power reported no immediate impact on its business operations, as its solar cell and module production is primarily aligned with domestic demand rather than export markets.
Historical Context and Sector Transformation
India's solar manufacturing ecosystem was largely established as an export-driven sector. During its formative years, more than 90% of modules produced were shipped abroad, with the United States emerging as the single largest market. "Numerous companies established manufacturing capacity specifically to cater to US demand, a dynamic that could now fundamentally alter business models across the entire sector," observed Vibhuti Garg, Director for South Asia at IEEFA.
Timing Challenges and Domestic Market Implications
The timing of this development presents particular challenges for India's solar industry. Ankit Jain, Vice President and Co-Group Head for Corporate Ratings at ICRA, noted that India's module manufacturing capacity already exceeds 140GW and is projected to cross 165GW by March 2027. In 2025 alone, India exported approximately 3GW of solar cells and modules to the United States.
"If these export volumes are redirected to the domestic market, prices could face significant pressure in an already oversupplied sector," Jain cautioned. This potential redirection comes as India's domestic demand has expanded rapidly in recent years, supported by domestic content requirements and stronger policy initiatives aligned with the country's renewable energy deployment targets.
Broader Trade Context and Future Opportunities
The US action against Indian solar exports follows similar measures against other Asian nations, including Vietnam, Thailand, Malaysia, and Cambodia, which already face substantial countervailing duties. Final duty rates for Indian exports are expected to be determined in July 2026, with trade flows likely to remain volatile until that resolution.
Analysts suggest that India's expanding network of trade agreements could help diversify export destinations, potentially opening new opportunities in European, African, and other emerging markets. This diversification strategy may prove crucial as the sector navigates this significant trade barrier while continuing to support India's ambitious renewable energy goals.
