India’s solar manufacturing sector faces fresh headwinds after the United States imposed a steep preliminary countervailing duty (CVD) of 125.87 per cent on
imports of certain Indian solar products, citing unfair subsidies.

The announcement — which comes at a time of a 10 per cent across-the-board tariff imposed by the Donald Trump administration — is expected to disrupt export prospects, intensify domestic price competition and add to regulatory uncertainty for manufacturers, even as most leading Indian players said the direct impact on their businesses would be limited due to diversified markets and stronger domestic demand.

On February 24, the US Department of Commerce announced preliminary affirmative determinations in countervailing duty investigations into imports of crystalline silicon photovoltaic cells, whether or not assembled into modules, from India, Indonesia and the Lao People’s Democratic Republic (Laos).

The department is also conducting parallel anti-dumping investigations into solar cells from the three countries. Unless postponed, the final determination in the CVD investigations is scheduled for July 6, 2026. The new duties come amid a sharp rise in Indian solar exports to the US, which increased to $792.6 million in 2024 from $83.86 million in 2022.

Countervailing duties are designed to protect domestic industries from subsidised imports that distort competition.

India has been promoting domestic renewable energy manufacturing to reduce import dependence, especially from China, with solar energy forming a key component of this strategy. Despite the steep duties, leading Indian manufacturers said the immediate impact would be limited.

Vikram Solar CMD Gyanesh Chaudhary said the company’s US order strategy was not structured around sourcing Indian cells and relied on a diversified supply chain with lower tariff exposure. He added that the company does not expect any material adverse impact on its ability to service US orders and anticipates stronger domestic installations.

Waaree Energies said it does not foresee any material impact on its US order book. The company said it had continued to ramp up shipments to the US during the first nine months of FY26 even when a 50 per cent duty was in force.

Premier Energies said it has reduced exports to almost negligible levels and, therefore, faces no impact. Exports to the US fell more than 50 per cent in 2025 and now account for only 5–7 per cent of production.

Emmvee Photovoltaic Power said its integrated manufacturing operations are primarily aligned with domestic demand, insulating the company from external trade developments.

However, analysts warned that the duties could alter trade flows, intensify price competition in domestic markets and affect profitability.

Rating agency Icra said the duties and rising regulatory uncertainty in the US could dampen export volumes, which were around 3 GW last year, and exert pricing pressure on domestic manufacturers.

Icra estimates India’s solar module manufacturing capacity at more than 140 GW at present, which could rise to over 165 GW by March 2027, indicating significant oversupply risks.

Crisil Intelligence said the US accounts for more than 95 per cent of India’s solar cell and module exports. Between April 2023 and November 2025, India exported cells and modules worth about ₹340 billion to the US.

Crisil director Sehul Bhatt said modules from India could become at least 30 per cent more expensive than US-made modules. However, some companies have begun expanding overseas to mitigate tariff risks.

Solar stocks declined sharply on Wednesday. Waaree Energies fell 10.47 per cent, Premier Energies 6.27 per cent, Vikram Solar 5.45 per cent on the BSE.