How Waaree protected its solar panel exports from US tariffs while Adani faltered
During recent investor calls, the company’s management sourced solar cells, the building blocks of Waaree-sourced solar panels, from suppliers in Southeast Asia to evade crippling tariffs imposed on India because U.S. tariffs on solar panel imports are determined by the country of origin of solar cells rather than the country in which the panels are assembled. The US’s tariffs on Southeast Asian countries such as Cambodia, Thailand and Vietnam face 19-20% tariffs, while Laos and Myanmar face 40% tariffs.
Waaree also has a panel production line in the US powered by imported cells with an annual capacity of 1.6 gigawatts, further ensuring business continuity. The company sold 275 megawatts worth of locally produced modules and 300 megawatts worth of imported modules in the US in the December quarter. He earned one third of his income ₹7,565 crore revenue was generated from abroad (mostly US), according to an investor presentation. In the September quarter, the company earned nearly half of its revenue. ₹6,227 crore comes from abroad.
A statistic shared by Waaree Energies management during the analyst call on January 22 showed how profitable the company’s solar energy exports to the United States are. The company sells modules in India ₹18-24 per watt depending on whether the cells are imported or domestic (the latter is more expensive). It makes about 28 cents in the US or ₹25 per watt, which can go up to 30 cents or ₹27.
With solar panel exports now expected to return to normal with the India-US trade deal reducing tariffs to 18% for India, this episode provides an interesting perspective on how companies are weathering one of the most significant business disruptions since the covid-19 pandemic.
Deficiency turns into opportunity
Adani New Industries Limited’s (ANIL) exports fell to zero in the December quarter after registering a sharp decline in the previous quarter, data showed. The company, part of Adani Enterprises Ltd, sold 997 megawatts worth of solar modules in the December quarter, all in the Indian market. In the September quarter, it sold 1,001 megawatts worth of modules, of which almost 50% were exported. In the previous quarter, approximately 1,379 megawatt modules were sold, 60% of which were exports.
ANIL mainly relies on cells manufactured in-house at its facilities in Mundra, Gujarat. The company has 4 gigawatts of cell manufacturing capacity and a corresponding 4 gigawatts of module-making capacity, giving it a cost advantage but less flexibility in cell sourcing.
In comparison, Waaree Energies has 21.2 gigawatts of module manufacturing capacity in India, but only 5.4 gigawatts of cell manufacturing capacity, forcing the company to import cells for the bulk of its module production. The company turned this shortfall into an opportunity to ease US tariffs.
“We are trying to minimize tariffs because if you buy cells from certain geographies, you can actually limit the amount of tariffs you have to pay,” Amit Paithankar, managing director of Waaree Energies, said in an Oct. 17 analyst call. 65% of Waaree ₹Paithankar, in his analyst call on January 22, said that the order book of ₹ 60,000 crore came from abroad.
Harshraj Aggarwal, vice president of institutional equity research at Yes Securities, said: “Even after the tariffs, US orders for Waaree Energies have come in and their realizations have also increased. The company has seen the benefit of having module assembly facilities in the US and possibly sourcing cells from Southeast Asian countries that have lower tariffs than India.” “The decline in Adani’s exports could be due to tariffs or increased domestic demand,” he added.
An executive familiar with the situation, who did not want to be named, said the pause in Adani’s solar energy exports to the US was temporary and came after discussions with customers in that country. The executive added that the company will resume exports soon as the tariff situation normalizes.
Analysts at credit rating agency ICRA said in a credit note dated December 22 that ANIL’s revenue and profitability growth are slightly impacted in the first half of FY26 compared to the previous year due to slowdown in sales realizations due to increased domestic and international competition along with the impact of US tariffs. This also led to a reorganization of the company’s order book, they noted. These headwinds are likely to impact demand in the long run, but ANIL can be partially hedged from such risks due to its backward integrated operations, stable demand within the group at Adani Green Energies Ltd and its strong position in the domestic market, ICRA analysts said.
Waaree Energies and Adani Group did not respond to Mint’s requests for comment.
Will more companies follow suit?
No other major solar panel manufacturer has significant ongoing exports to the United States, but some are considering entering this market. One of them is Vikram Solar Ltd, which is also considering sourcing cells from countries with lower tariffs than India for exports to the US, management said in an analyst call on January 20. He said it was. About 16% of the order book comes from abroad, but the company has not started exporting yet. Company management said in its analyst call on October 29 that Premier Energies Ltd was also considering expanding into the United States, but suspended its plans due to tariff uncertainty.
“It is not appropriate to use Indian cells for export due to the reciprocal tariff imposed on India. Therefore, a UFLPA compliant and FEOC compliant supply chain from other Southeast Asian countries needs to be worked out and pre-approved from CBP before we can export to the US,” Rinal Shah, managing director of corporate finance at Vikram Solar, said in an investor call on January 20.
UFLPA refers to the U.S. Uyghur Forced Labor Prevention Act (UFLPA), which has been in effect since June 2022 and prohibits the import of goods produced in whole or in part in China’s Xinjiang Uyghur Autonomous Region (XUAR). FEOC is a ‘foreign concern’, a name given to entities in China, Russia, Iran and North Korea that are restricted from involvement in US energy projects. CBP is the agency of U.S. Customs and Border Protection that regulates international trade movement and tariff collection in the North American country.
Vikram Solar did not respond mint requests for comments.
