Indian Solar Imports Face 126% US Tariff in 2026

US Imposes Steep Tariffs on Indian Solar Imports

The Trump administration has announced a preliminary duty of 126% on solar imports from India, a significant trade measure that threatens to disrupt a rapidly growing export market for Indian manufacturers. The US Commerce Department justified the decision by stating that its investigation found India was providing unfair subsidies to its domestic solar manufacturing sector. This, according to US officials, allowed Indian exporters to sell their products at prices that undercut American producers, creating an uneven competitive landscape.

This move is part of a broader effort to protect the domestic US solar industry. Alongside the tariff on India, the Commerce Department also set initial duties for other Asian nations. Solar imports from Indonesia will face duties ranging from 86% to 143%, while those from Laos will be subject to an 81% tariff. These country-specific duties are distinct from the broader global tariffs recently introduced by the administration after a previous tariff structure was struck down by the US Supreme Court.

The Surge in Southeast Asian Imports

The decision to impose these duties follows a notable shift in the global solar supply chain. In the first half of 2025, India, Indonesia, and Laos collectively accounted for 57% of all solar module imports into the United States. This surge occurred after the US had previously imposed steep tariffs on four other Southeast Asian countries, which had been the primary source of solar panels. US developers and installers subsequently shifted their sourcing to nations like India to secure more cost-effective supplies.

The growth in imports from India has been particularly sharp. According to data from the Commerce Department, solar imports from India were valued at $192.6 million in 2024. This figure represents a more than nine-fold increase from the import value recorded in 2022, highlighting India's rising prominence as a key supplier to the American market. This rapid expansion, however, attracted scrutiny and ultimately led to the trade petition that triggered the investigation.

Protecting Domestic Manufacturing

The investigation into subsidies was initiated after a petition from the Alliance for American Solar Manufacturing and Trade, a coalition of US-based solar producers. The group argued that foreign subsidies were distorting the market and making it impossible for American companies to compete fairly. They contended that a probe was essential to protect domestic manufacturing capacity and the jobs associated with it.

Tim Brightbill, the lead attorney for the Alliance, praised the Commerce Department's preliminary finding. He described it as a crucial step toward restoring fair competition in the US solar market. "American manufacturers are investing billions of dollars to rebuild domestic capacity and create good-paying jobs," Brightbill stated. "Those investments cannot succeed if unfairly traded imports are allowed to distort the market."

Impact on Indian Solar Exporters

The immediate impact of the 126% duty is expected to be severe for Indian solar panel manufacturers. Financial analysts predict that the high tariff rate will effectively close off the US market. Vikram Bagri, an analyst at Citi, wrote in a research note that the duties would make the US market "largely unavailable" for Indian solar companies. This development places significant pressure on firms that have invested heavily in expanding their production capacity to serve American clients.

Companies like Waaree Energies Ltd., which has a substantial presence in the US, are expected to be directly affected. During a recent earnings call, Waaree's management identified the US as a key market and noted ongoing investments to expand its operations there. Other companies, such as Vikram Solar, which has about 20% of its order book linked to exports, will also face challenges. Premier Energies Ltd., with more limited exposure to the US, may be less affected.

Next Steps and Broader Implications

This trade action introduces new tensions in the economic relationship between the US and India, coming shortly after the two nations had struck a bilateral trade deal aimed at reducing economic friction. A meeting scheduled to discuss the interim trade deal has reportedly been postponed in the wake of the tariff announcement.

The current duties are preliminary. The Commerce Department is scheduled to issue its final determination on the investigation by July 6, 2026. In addition to the subsidy probe, the department is also conducting a concurrent anti-dumping investigation into solar cells imported from India, Indonesia, and Laos. The outcomes of these final rulings will determine the long-term landscape for solar trade between these countries and the United States.

Conclusion

The imposition of a 126% preliminary duty on Indian solar imports marks a significant escalation in US trade protectionism within the renewable energy sector. While intended to support domestic manufacturers, the move is set to block a major export channel for Indian companies and could lead to increased costs for solar projects in the US. The industry now awaits the final determination in July, which will provide clarity on the future of solar trade relations.