US imposes 126% duty on Indian Solar imports, exporters hit

NEW DELHI: The US commerce department's decision to impose nearly 126% countervailing duty on certain solar goods imported from India has come as a big setback to manufacturers.Industry players said they will have to scale up domestic supply in the near term and look for alternative markets in the long run. While India's solar module manufacturing capacity is estimated at over 160 gigawatts (GW), domestic demand is only about 40-45 GW.The duties will be over and above tariffs announced by the US administration, which claimed Indian solar products were unfairly subsidised by New Delhi. It has also imposed different duties on imports of 'crystalline silicon photovoltaic cells, whether or not assembled into modules' from Indonesia and Laos.According to the US order, solar imports from India rose nearly ninefold from $84 million in 2022 to $792.6 million in 2024.Industry experts said the preliminary countervailing duty will hit export-focused Indian manufacturers.“India exported cells and modules worth nearly Rs 340 billion to the US between April 2023 and Nov 2025. This was supported by the lower cost of Indian modules compared with those made in the US, both using imported cells – an advantage the duties will erode,” said Sehul Bhatt, director, Crisil Intelligence.

He said the US accounts for over 95% of India’s solar cell and module exports, which will now become at least 30% more expensive than US-made products, rendering them unviable. “The announcement comes at a time when Indian players have planned healthy capacity expansion over the next three years. We believe the duties will create volatile trade patterns till final determination of the rates, forcing companies to navigate limited market opportunities amid supply addition,” he added.Rishabh Jain, fellow at the Council on Energy, Environment and Water, said India must accelerate domestic deployment and cultivate alternative export markets.Tarun Padhi, senior VP - operations at Datta Power Infra Private Limited, said the impact may vary, as many domestic players import cells from low-duty countries and assemble panels in India for export.The National Solar Energy Federation of India said it hopes the proposed bilateral trade deal between India and the US will supersede the duties, ensuring stability for exports.“The Indian govt has initiated a process to allow solar manufacturing units within special economic zones to sell in the domestic tariff area, providing manufacturers an alternative by opening the vast domestic market and reducing over-reliance on a single export destination,” NSEFI chief executive officer Subrahmanyam Pulipaka said.