January 27, 2026e-Paper
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January 27, 2026e-Paper
Published – January 27, 2026 08:30 am IST
President Droupadi Murmu addresses the inaugural session of the Eighth International Solar Alliance Assembly, in New Delhi on October 28, 2025. | Photo Credit: ANI
The story so far:
On January 7, the U.S. government announced that it would withdraw from 66 international organisations. The reason given was that these bodies no longer served American interests. Among them were major climate platforms, including the International Solar Alliance (ISA), an organisation headquartered in India and jointly led by India and France.
The ISA was set up in 2015 to make solar power cheaper and easier to adopt, especially in developing countries. While it doesn’t build solar plants itself, it helps countries access finance, reduce risk for investors, and speed up solar adoption. Today, the Alliance has over 120 member countries and works across Africa, Asia, and island nations. The U.S. joined fairly late, in 2021. Over three years, it has contributed around $2.1 million.
The U.S. exit will not really harm the alliance financially. U.S. contribution made up only about 1% of the Alliance’s total funds. Indian officials have already said that the ISA’s day-to-day work will continue, and that ongoing programmes will not be shut down. Moreover, training and capacity-building efforts are still in place.
But economics is not only about budgets, it’s also about confidence. And that’s where the ripple effects begin.
As India does not depend on the U.S. for solar panels or key equipment, solar power will not become more expensive. In fact, India now makes a large share of solar components on its own. As of late 2025, India’s solar module manufacturing capacity was close to 144 gigawatts. Solar cell manufacturing was around 25 gigawatts and is growing fast, with Indian companies investing across the entire supply chain.
Moreover, China is by far the largest producer of high-efficiency mass market solar modules and cells, with 70% of the global cell producing capacity. In fact, India imported about $1.7 billon worth of Photovoltaic (PV) modules from China in FY25, as per a Ministry of New and Renewal Energy (MNRE) report in Parliament.
This makes it clear that the recent U.S. decision does not push up project costs in India. It does not affect electricity tariffs either. For consumers, nothing changes.
Again, unlikely. Most solar projects in India are driven by domestic demand. They are backed by long-term contracts with state utilities and central agencies. Investors look at India’s power demand, policy stability, and growth potential.
The U.S. is not the main source of funding for Indian solar projects. Indian banks, global funds, and development institutions continue to invest based on India’s market fundamentals. So the pipeline of projects inside India remains intact. Even with respect to jobs, India is relatively well-protected. Solar jobs in India come mainly from manufacturing, installation, and operations within the country. Since India is rapidly building a strong local manufacturing capacity, these jobs are not affected by U.S. climate policy. There is even a possible upside. As the U.S. becomes more inward-looking and slows renewable approvals at home, it may still need clean energy equipment. With the U.S. having supply tensions with China and Mexico, Indian manufacturers could find openings, either through exports or by setting up units that meet U.S. standards. A lot however, hinges on the ongoing talks for a bilateral trade agreement between New Delhi and Washington.
Mostly outside India. The ISA works extensively in Africa and poorer developing countries. These regions depend heavily on cheap loans and international cooperation to build solar projects. When a large economy like the U.S. steps back from climate engagement, lenders can turn cautious; projects can slow down; and decisions can take longer. If solar growth slows in these regions, Indian companies looking to expand abroad may feel the impact.
The ISA is also one of India’s key tools for climate leadership and diplomacy in the Global South. It helps India build influence, open markets, and support Indian companies overseas. While the U.S. exit removes one influential partner and some technical expertise, it does not change who leads the alliance. India still does. That leadership now comes with more responsibility.
Solar power in India does not become costlier, domestic projects are not threatened, and jobs inside India remain secure. The real challenge then is a more divided global climate landscape, where cooperation is harder and emerging markets need to work harder to attract finance. For India’s solar industry, this is not a shock. It is a stress test. And compared with where it stood a few years ago, India appears to be better prepared to handle it.
Published – January 27, 2026 08:30 am IST
Text and Context / The Hindu Explains / solar / USA
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