1. Heavy Duty Imposed:
The United States
Department of Commerce has imposed a nearly 126% countervailing duty
on certain solar goods imported from India, citing unfair subsidies.
2. Additional to Existing Tariffs:
The new duty will be over
and above existing US tariffs, making Indian solar exports
significantly more expensive.
3. Sharp Rise in Imports:
US solar imports from India increased nearly ninefold, from $84 million in 2022 to $792.6 million in
2024, prompting the action.
4. Exports Heavily Dependent on US:
The US accounts for over
95% of India’s solar cell and module exports, making Indian
manufacturers highly vulnerable to this decision.
5. Cost Competitiveness Eroded:
Indian modules were cheaper than US-made products due to lower costs. The new
duties could make Indian products at
least 30% more expensive, reducing viability.
6. Impact on Capacity Expansion Plans:
Indian manufacturers have planned significant capacity expansion over the next
three years. The duties may disrupt these plans and create volatile trade
patterns.
7. Domestic Capacity vs Demand Gap:
India has over 160 GW
solar module manufacturing capacity, while domestic demand is
only 40–45 GW,
increasing export dependence.
8. Call for Market Diversification:
Experts suggest India must accelerate
domestic solar deployment and explore alternative export markets
to reduce reliance on the US.
9. Mixed Impact Across Players:
Some companies importing cells from low-duty countries and assembling modules
in India may face varying
levels of impact.
10. Hope from Bilateral Trade Deal:
The National Solar Energy
Federation of India expects the proposed India–US trade deal to
potentially ease the situation.
11. Government Support Measures:
The Indian government has initiated steps allowing solar units in Special Economic Zones (SEZs)
to sell in the domestic tariff area, offering an alternative to export-heavy
players.
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.