US imposes preliminary 126% countervailing duties on Indian solar imports, hitting manufacturers after finding unfair government subsidies that undercut American producers; this affects $4.5B in annual trade from India, Indonesia, and Laos, which supplied 57%+ of US solar modules in H1 2025.

US Solar Duties on India – Key Facts

Aspect	Details
Duty Rate	125.87% (preliminary CVD on India)
Other Countries	Indonesia 104.38%, Laos 80.67%
Trade Impact	India solar exports to US: $792M in 2024 (9x growth from 2022)
Market Share	India+Indonesia+Laos = 57% of US solar imports (H1 2025)
Final Decision	Expected July 6, 2026 + separate anti-dumping probe
Petitioner	Alliance for American Solar Manufacturing & Trade (First Solar, Hanwha Qcells, etc.)

Why now? After US duties on SE Asia → Chinese firms shifted to India → now "subsidy investigation" claims Indian govt support lets exporters undercut US producers.

Indian Solar Stocks Crashed

Immediate market reaction: Solar EPC/manufacturing stocks plunged 10–25% as US represents key export market amid domestic capacity ramp-up.

Company	Sector	% Fall (Feb 24)
Waaree Energies	EPC/Modules	-15%
Tata Power	EPC	-12%
Adani Green	IPP	-8%
Premier Energies	Modules	-18%

What Triggered US Action?

1. Subsidy Claims: US alleges Indian govt provides unfair manufacturing incentives → countervailing duties (CVD) to "level playing field".

2. Supply Chain Shift: Post-China → SE Asia → now India/Indonesia/Laos → US tracking "circumvention" via new production hubs.
3. Domestic Protection: First Solar, Hanwha Qcells lobbying to protect $Bns in US factory investments.
4. Timing: Comes after US Supreme Court struck down sweeping Trump tariffs → targeted sector-specific duties via Commerce Dept.

Process: Preliminary CVD → anti-dumping probe (next month) → final duties July 6 → ITC injury determination.

Strengths – Indian Solar Sector (Despite Duties)

• Massive domestic demand: India needs 500 GW RE by 2030 → exports just ~10–15% of capacity.
• PLIs working: Module manufacturing capacity exploding → self-reliance push reduces long-term import dependence.
• US = small market: Europe, Middle East, Africa remain key export destinations unaffected.
• Duty not final: Preliminary stage → 6 months for negotiations/legal challenges.
• Diversification: EPC/IPP players less exposed than pure exporters.

Risks – Indian Solar Exporters

• US market closure: 126% duties → exports to US economically unviable (~$800M annual hit).
• Stock derating: High export-exposed cos face margin compression + valuation haircut.
• Capacity utilisation: New factories built for exports now face demand gap.
• Retaliation risk: US-India trade deal fragile → tit-for-tat escalation possible.
• Global contagion: Other markets may follow US subsidy scrutiny model.

What Happens Next?

Short-term (1–3 months)

• Anti-dumping probe: Separate investigation into "below-cost selling" → additional duties possible. ​
• Stock volatility: Solar names likely range-bound/consolidation till clarity.
• Order rebooking: Exporters pivot to Europe/Africa; margins may compress short-term.

Medium-term (6–12 months)

• Final CVD July 6: Rates could change up/down based on evidence → appeals/legal challenges.
• ITC Injury Test: US producers must prove material injury → duties only if affirmative.
• Bilateral talks: Recent US-India trade deal → possible exemptions/negotiations. ​

Long-term (2+ years)

• Domestic pivot: Export cos become India-focused → benefit from 500 GW target.
• New markets: Middle East, Africa, LatAm → geographic diversification.
• PLI 2.0: Continued govt support → cost competitiveness improves.

FAQs – US Solar Duties on India

1. Are the 126% duties on Indian solar imports final?
No – these are preliminary countervailing duties. Final decision expected July 6, 2026 after evidence review + separate anti-dumping probe.

2. Which Indian solar companies are most impacted?
Pure exporters like Mundra Solar (-22%), Waaree Energies (-15%), Premier Energies (-18%) hit hardest. IPP players (Adani Green) relatively insulated.

3. Does this kill Indian solar exports to US?
Effectively yes – 126% duties make exports economically unviable. Citi: "US market largely unavailable" for Indian manufacturers.

4. How big was US market for Indian solar?
India exported $792M solar goods to US in 2024 (9x growth from 2022), part of $4.5B from India+Indonesia+Laos (57% of US imports).

5. Can Indian companies challenge these duties?
Yes – formal appeals, bilateral trade talks (recent US-India deal), WTO dispute if needed. 6-month window before final duties.

6. Is domestic solar demand enough to absorb excess capacity?
Short-term challenge – yes, India needs 500 GW RE by 2030, but ramp-up takes time. Companies must pivot to Europe/Africa meanwhile.

7. Should investors buy solar stocks now (buy the dip)?
High risk/reward: Pure exporters risky near-term, but domestic leaders with diversification may recover. Not personalised advice – review RHPs.