US move to impose 126% tariff on solar imports set to hit Indian firms hard

The proposed move to impose a whopping 126% countervailing duty on Indian solar cells and panels by the US Commerce Department is likely to significantly impact Indian exports to the US. The US has been a key growth market, especially as Indian companies expand their solar cell and module production capacity. Higher duties could reduce price competitiveness and delay shipments or new orders in the short term.

However, this also creates an opportunity to diversify export markets and deepen domestic demand. As companies continue scaling capabilities, the shift may accelerate investments in advanced manufacturing, innovation, and efficiency, supporting a more resilient long-term position for India in the global solar value chain, said Vasudha Madhavan, Founder & CEO, Ostara Advisors, an investment banking firm.

Indian solar products that are more expensive in the US market will automatically have a reduced demand and therefore the production too. This will eventually lead to loss of market share in this particular category, according to exporters.

India accounted for 57% of US solar module imports in the first half of 2025 alone. This business is now likely to go to other countries. Lower business will result in reduced revenues for Indian companies like Waaree Energies and Vikram Solar, who have significant US exposure, among others.

Currently, for example, from the reports available, Waaree Energies has about 60% of its order book tied to US exports. Similarly, Vikram Solar has about 20% of orders booked from US exports and Premier Energies, which, of course, have only limited US exposure hitherto. These and other similar Indian manufacturers may be compelled to explore alternative markets or adjust supply chains sooner than later, said Krishna Mariyanka, Government Relations Consultant, Ajira Global.

“The flip side for them, however, is that the US developers may face higher costs, potentially slowing solar installations. We have to see how all this pans out over the next few months until such time the US Commerce Department issues a final ruling in this connection, which is expected around July 2026,” he said.

According to solar industry sources, India's solar cell and panel exports to the US are around 97% of India's total solar module exports. Confirmed details of 2024-2025 are not available, but in 2023-2024 alone, India has exported approximately $1.97 billion worth of solar modules, with the US being the primary destination. To break it down further, India shipped approximately 10.4 GW of solar modules to the US in only the first nine months of 2025.

Abhishek Pareek, Group Head Finance, Waaree Energies, said, "The matter remains subject to ongoing regulatory proceedings and the final outcome is expected over the next few months. During 9MFY26, we ramped up deliveries for US shipments despite the earlier imposition of 50% duty on imports from India.”

In addition, Waaree has been progressively strengthening its US-based manufacturing footprint as part of its long-term strategy to support localised production and serve customers in the United States market. As of the date, the company has an aggregate US module manufacturing capacity of approximately 2.6 GW, including capacity acquired pursuant to the acquisition of the Meyer Burger facility. The Company is in the process of further expanding its US manufacturing capacity to approximately 4.2 GW by the end of the current financial year, subject to operational ramp-up timelines and other customary factors.

“At this stage, the company does not anticipate any material adverse impact on its ability to service its US order book," Pareek said.

Bengaluru-based Emmvee Photovoltaic Power Limited said it does not see any impact on its business as its solar cell and module manufacturing is primarily aligned to domestic demand.

India continues to present significant growth opportunities in renewable energy, and Emmvee remains focused on scaling high-efficiency manufacturing to serve this expanding domestic market, a company spokesperson said.

Pushpank Kaushik, CEO & Head of Business Development (Subcontinent, Middle East, and Southeast Asia) at Jassper Shipping, said, “The 126% countervailing duty is a serious blow for Indian solar exporters. At that level, the US market becomes commercially unviable almost overnight. Shipments will slow, contracts may be reconsidered, and exporters will have to rethink their US strategy quickly. Hence, we expect short-term volatility in volumes and a likely redirection of cargo to Europe, the Middle East, and other emerging solar markets.”

Vinay Rustagi, Chief Business Officer, Premier Energies, said they have already reduced the share of exports to almost nil, and there is no impact of any US duties on the business.