US’ 126% levy eclipses key market for Indian solar gear companies
Shares of leading Indian solar manufacturers such as Waaree Energies, Premier Energies and Vikram Solar fell sharply on the stock markets as investors priced in potential export tailwinds.
The U.S. Department of Commerce announced on February 24 that it made preliminary positive findings from CVD studies of crystalline silicon photovoltaic cells and modules in India, Indonesia, and Laos, concluding that manufacturers in those countries benefited from government subsidies that allegedly distorted competition in the U.S. market.
The final decision on these CVD studies is scheduled to be published on July 6. It was stated that the value of solar energy imports from India in 2024 was 792.6 million dollars, more than nine times the value in 2022. These duties are separate from the Donald Trump administration’s sweeping global tariffs, which the U.S. Supreme Court struck down last week and have since been set at 10%.
Lower Shipments Since August
It has since been set at 10 percent, but Trump has threatened to raise those rates to 15 percent.
Vikram Solar said it operates with a diversified supply chain, including sourcing from geographies that face lower tariffs for the US market, so the direct financial impact is limited.
Waaree Energies also said it has a diversified sourcing strategy, including investments in Oman for traceable, non-China polysilicon supplies, as well as US-based manufacturing, as part of a long-term strategy to support localized manufacturing. The company has 2.6 GW of total U.S. module manufacturing capacity and is in the process of increasing that capacity to 4.2 GW by the end of the current fiscal year. “At this stage, the company does not anticipate any material adverse impact on its ability to service its U.S. order book,” Waaree said. Indian solar equipment manufacturing companies started reducing their exports after the US investigation was announced in August, experts said.
Premier Energies, one of the largest exporters, said its share of overseas sales had been reduced to almost zero and the higher taxes would not have any impact. The statement stated that “US policy has been steadily moving towards banning all imports and this investigation was announced in August.” “Indian manufacturers have had a long time to develop our sales strategy and business models.”
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The Indian solar industry expects trade talks between the two countries to provide clarity.
“We are optimistic that if the Indian government and the US administration successfully conclude the proposed bilateral trade agreement currently under negotiation, these tasks will likely be fulfilled by the new agreement, ensuring continued stability in India’s solar energy exports,” said Subrahmanyam Pulipaka, CEO of the National Solar Energy Federation of India.
Analysts have highlighted limited access to the US, the biggest destination for India’s solar exports in the last two years. Since June, India’s solar cell exports to the US have fallen sharply. Module shipments have declined since October due to tariff implementation and investigations. Module exports had increased for several months before October in anticipation of U.S. tariffs.
“The duty ratio is based on available facts with adverse implications. This shows that the information was provided by the petitioner,” said a trade expert. A negative decision would be a setback to India’s production-linked incentive (PLI) program for solar photovoltaic modules, the person said.
Experts said “adverse facts” are the toughest method used in cases where authorities find parties are not cooperating. This approach leads to the highest subsidy rates and possible retroactive taxes. “The action reflects Washington’s broader strategy to reduce supply chain dependence on China and increase domestic solar energy production,” said Ajay Srivastava, founder of think tank GTRI.
Those affected will have time to respond to the preliminary findings before the United States makes a final decision.
The United States is also conducting an anti-dumping investigation against these products imported from three countries.
In both antidumping and countervailing duty investigations, following issuance of a preliminary ruling, the law requires the U.S. Department of Commerce to verify information submitted by foreign manufacturers and governments. This department uses this process to verify the information submitted by them. Upon completion of verification, it publishes a report summarizing the findings.
While some of these companies rely on increasing domestic demand, there are concerns about increasing domestic production capacity and the need to find alternative markets.
According to NSEFI’s Pulipaka, the government has already started the process of allowing solar power generation units located in special economic zones to sell their products in domestic tariff areas. He said this was to provide an alternative to Indian manufacturers and reduce over-dependence on any one export destination.
Vikram Solar also said its growth strategy remains closely tied to India, where demand remains structurally strong.
Countries such as China, Malaysia, Cambodia, Thailand and Vietnam currently face taxes on solar energy exports to the United States.
