US' 126% solar tariffs roil India’s glut-stricken panel makers

A new, 126% US tariff on solar imports from India has battered shares in major exporters, as investors brace for the impact on a once-booming industry already struggling with overcapacity and price pressure.

The Trump administration set preliminary duties this week, following petitions filed by US solar manufacturers last year. They had argued that Chinese companies were flooding the American market with unfairly subsidized products made in countries in South and Southeast Asia — including India.

Also Read: US sets initial duties on Indian solar imports at 126%


Indian solar manufacturers expanded rapidly in recent years, relying heavily on sales to a lucrative US market that is now effectively sealed off. Shares in top exporter Waaree Energies Ltd. fell 10% on Wednesday, while rival Premier Energies Ltd. closed down more than 6%.

“This makes Indian solar exports to the US totally uncompetitive,” said Rupesh Sankhe, senior vice president for research at Elara Capital India Pvt. “As a result of overcapacity in modules, we are going to see pressure on prices.”

Meanwhile, India has begun to incentivize manufacturers to move up the value chain. A mandate for all solar modules to use locally-made cells will come into effect in June, and provides some relief for producers, he said.

Also Read: Vikram Solar says 126% US duties won’t dent finances, shares slip 5%

Waaree Energies played down the tariff’s fallout on Wednesday, saying the firm does not source material from China for products sold to America and is expanding manufacturing capacity in the US to keep serving the market.

India’s biggest solar maker plans to boost its US capacity to 4.2 gigawatts by the end of the year, from 2.6 gigawatts now, chief executive officer Amit Paithankar said on a call. It’s also begun pilot production at its polysilicon plant in Oman, seeking to secure a fully-compliant supply chain to serve the US market, which it expects to use as much as 80 gigawatts of modules annually.

Other manufacturers are hopeful of finding new markets beyond the US.

“There is some opening emerging in Europe, where there’s increasingly an anti-China stance,” said Premier Energies’ Chief Business Officer Vinay Rustagi, a day before the new tariffs were imposed. “We are monitoring that opportunity.”

India’s capacity to make modules has climbed 13-fold since 2020, according to BloombergNEF, when pandemic-related supply disruptions spurred a buildup of local production. The surge has been extreme enough to prompt the government to advise lenders to also fund other areas of the supply chain.

Indonesia and Laos were also targeted in this round of US duties, but with the exception of one Indonesian firm — PT Blue Sky Solar — India faces the highest rate among the three. The final decision on these tariffs is due to be published July 6. The US Commerce Department is concurrently pursuing an anti-dumping probe into the same countries.