US Imposes Heavy 126% Duty on Indian Solar Imports, Major Blow to Manufacturers
The United States commerce department has delivered a significant setback to India's solar industry by imposing a preliminary countervailing duty of nearly 126% on certain solar goods imported from India. This decision targets products that the US claims are unfairly subsidized by the Indian government, adding to existing tariffs and creating a challenging environment for exporters.
Impact on Indian Solar Exports and Market Dynamics
Industry players express deep concern, noting that this duty will severely impact export-focused Indian manufacturers. According to data, solar imports from India surged dramatically, rising from $84 million in 2022 to $792.6 million in 2024, a nearly ninefold increase. Sehul Bhatt, director at Crisil Intelligence, highlights that India exported cells and modules worth approximately Rs 340 billion to the US between April 2023 and November 2025. This export boom was largely driven by the lower cost of Indian modules compared to US-made products, an advantage now eroded by the new duties.
Bhatt further explains that the US accounts for over 95% of India's solar cell and module exports. With the duties, these products will become at least 30% more expensive than US-made alternatives, rendering them economically unviable in the American market. This announcement comes at a critical juncture, as Indian companies have planned substantial capacity expansions over the next three years, potentially leading to volatile trade patterns until final duty rates are determined.
Industry Responses and Strategic Shifts
In response to this challenge, industry experts emphasize the need for strategic adjustments. Rishabh Jain, a fellow at the Council on Energy, Environment and Water, advocates for accelerating domestic deployment of solar energy and cultivating alternative export markets to reduce dependency on the US. Tarun Padhi, senior vice president of operations at Datta Power Infra Private Limited, notes that the impact may vary among manufacturers, as many import cells from low-duty countries and assemble panels in India for export, potentially mitigating some effects.
The National Solar Energy Federation of India (NSEFI) remains hopeful that a proposed bilateral trade deal between India and the US could supersede these duties, ensuring stability for exports. Additionally, Subrahmanyam Pulipaka, CEO of NSEFI, points out that the Indian government has initiated measures to allow solar manufacturing units within special economic zones to sell in the domestic tariff area. This move aims to open the vast domestic market, which currently has a demand of only about 40-45 gigawatts compared to a manufacturing capacity of over 160 gigawatts, thereby reducing over-reliance on a single export destination.
Broader Context and Future Outlook
This duty imposition is part of a broader US trade action, with similar duties applied to imports of crystalline silicon photovoltaic cells from Indonesia and Laos. The US administration argues that these measures are necessary to address unfair subsidies, but Indian manufacturers face immediate pressure to scale up domestic supply in the near term and explore long-term alternatives. As the solar industry navigates these turbulent times, stakeholders are calling for policy support and market diversification to sustain growth and competitiveness in the global renewable energy landscape.
