US Imposes 126% Solar Import Duty on India
The recent imposition of a 126% solar import duty on India by the United States is set to create significant ripples in the Indian solar industry and its trade relations with the US. This decision comes as a response to a noticeable surge in imports from India, Indonesia, and Laos, which accounted for a staggering 57% of the US solar module imports in the first half of 2025. This surge is largely seen as a strategic move to bypass barriers faced by Chinese manufacturers.
Chinese solar companies have found it increasingly difficult to navigate the US market due to stringent regulations. Consequently, many have relocated their production to Southeast Asia, leading to a boom in imports from countries like India. However, this shift has now put Indian solar photovoltaic (PV) module manufacturers in a precarious position, as the high import duty will likely result in an oversupply within the domestic market.
For Indian manufacturers, this situation raises several concerns. The imposition of such a hefty duty means that their products will become significantly less competitive in the US market. As they scramble to sell their stock domestically, prices may drop, potentially harming the overall profitability of the industry.
At the same time, the US solar firms are also facing challenges. The new import duty effectively locks out Indian supplies, which could lead to increased project costs. This is particularly problematic as the US solar industry is already grappling with high interest rates and a climate of uncertainty regarding policies. The combination of these factors might hinder the growth and expansion of solar projects in the US, pushing costs up further.
This development raises serious questions about the future of trade relations between India and the US. As both nations navigate this complex scenario, the implications for the solar industry on both sides of the Pacific remain uncertain. Will India find new markets to compensate for the loss of US exports? And how will US firms adapt to the higher costs of solar project implementation? The answers to these questions will be crucial in determining the trajectory of the solar energy sector in both countries.
