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Mumbai: Smart supply-chain manoeuvres and assembling in the United States helped India’s top solar panel exporter Waaree Energies maintain its lucrative trade with the country in the face of steep 50% tariffs on India, even as the exports of its main domestic rival Adani New Industries Limited faltered.
Waaree sourced solar cells, the building blocks of solar panels, from suppliers in Southeast Asia to escape the crippling tariffs levied on India, the company’s management said during recent investor calls, as the US tariffs on solar panel imports are levied based on the country of origin of the solar cells rather than the country where the panels are assembled. US tariffs on Southeast Asian countries such as Cambodia, Thailand and Vietnam are 19-20%, while Laos and Myanmar face 40% tariffs.
Waaree also has a panel manufacturing line in the US with a 1.6 gigawatts-per-annum capacity that runs on imported cells, further securing business continuity. The company sold 275 megawatts worth of locally produced modules and 300 megawatts worth of imported modules in the US during the December quarter. It earned a third of its ₹7,565-crore revenue from overseas – predominantly the US – according to an investor presentation. During the September quarter, the company earned nearly half of its ₹6,227-crore revenue from overseas.
A statistic shared by the Waaree Energies management during a 22 January analyst call showed just how lucrative its solar exports to the US are. The company sells modules in India for ₹18-24 per watt depending on whether the cells are imported or domestic (the latter cost more). In the US, it earns around 28 cents or ₹25 per watt, which can rise to 30 cents or ₹27.
While solar-panel exports are now expected to normalize with the India-US trade agreement lowering tariffs on India to a competitive 18%, the episode provides an interesting insight into how companies navigated one of the most significant business disruptions since the covid-19 pandemic.
Shortcoming becomes opportunity
Exports by Adani New Industries Limited (ANIL) dropped to zero in the December quarter after clocking a sharp decline in the previous quarter, data showed. The company, a part of Adani Enterprises Ltd, sold 997 megawatts worth of solar modules during the December quarter, all in the Indian market. During the September quarter, it sold 1,001 megawatts worth of modules, almost 50% of which were exports. The quarter before that it sold about 1,379 megawatts of modules, with 60% being exports.
ANIL relies mainly on cells made in-house at its facilities in Mundra, Gujarat. The company has 4 gigawatts of cell manufacturing capacity and a corresponding 4 gigawatts of module making capacity, which gives it a cost advantage but less flexibility on cell sourcing.
In contrast, Waaree Energies has 21.2 gigawatts of module manufacturing capacity in India but just 5.4 gigawatts of cell manufacturing capacity, which compels the company to import cells for the bulk of its module manufacturing. The company turned this shortcoming into an opportunity to mitigate US tariffs.
“We try to minimize the tariff because if you buy cells from specific geographies, you are actually able to limit the amount of tariff that you need to pay,” Amit Paithankar, the chief executive of Waaree Energies said in an analyst call on 17 October. As much as 65% of Waaree’s ₹60,000-crore order book was from overseas, Paithankar said in an analyst call on 22 January.
Harshraj Aggarwal, executive vice president, institutional equity research at Yes Securities, said, “Even after tariffs, US orders came for Waaree Energies and their realisations have also gone up. The company benefitted from having module assembly plants in the US and also from possibly sourcing cells from Southeast Asian countries with lower tariffs than India.” He added, “The reason for a drop in Adani’s exports could be tariffs or higher domestic demand.”
The pause in Adani’s solar exports to the US was temporary and came after conversations with its clients in that country, said an executive familiar with the situation, who did not wish to be named. With the tariff situation normalizing, the company is likely to resume exports soon, the executive added.
Analysts at credit rating agency ICRA said in a credit note on 22 December that ANIL’s revenue and profitability growth were affected slightly in H1 FY2026 as compared to the previous year because of a moderation in sales realisations owing to increasing domestic and international competition, coupled with the impact of US tariffs. This also led to a realignment of the company’s order book, they noted. While these headwinds are likely to affect demand over the long term, the ICRA analysts said, ANIL could be partly insulated from such risks owing to its backward-integrated operations, captive demand within the group at Adani Green Energies Ltd, and its strong position in the domestic market.
Waaree Energies and the Adani Group did not respond to Mint’s requests for comment.
Will more companies follow suit?
No other major solar panel maker has significant ongoing exports to the US, though some are looking at entering that market. One of these is Vikram Solar Ltd, which also considered sourcing cells from countries with lower tariffs than India to export to the US, management said in an analyst call on 20 January. About 16% of its order book is from overseas, but the company is yet to start exports. Premier Energies Ltd also was also looking to expand into the US but put its plans on hold due to tariff uncertainty, the company’s management said in an analyst call on 29 October.
Rinal Shah, general manager – corporate finance at Vikram Solar said in an investor call on 20 January, “Indian cells are unviable to use for exports because of the reciprocal tariff imposed on India. Hence, a UFLPA-compliant and FEOC-compliant supply chain from other Southeast Asian countries needs to be worked out and have pre-approval from the CBP for us to be able to export to the US.”
UFLPA refers to the US’s Uyghur Forced Labor Prevention Act (UFLPA), in force since June 2022, which prohibits the import of goods that are produced wholly or in part in China’s Xinjiang Uyghur Autonomous Region (XUAR). FEOC is ‘foreign entity of concern’, a designation for organizations from China, Russia, Iran and North Korea, which are restricted from US energy projects. CBP is the US Customs and Border Protection, which regulates international trade movement and tariff collection in the North American country.
Vikram Solar did not respond to Mint’s requests for comment.
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