The United States‘ move to impose a preliminary countervailing duty (CVD) of 126% on solar cells and modules imported from India, has triggered concern across the domestic manufacturing sector, even as New Delhi feels that companies would have to pursue legal remedies rather than diplomatic intervention. Market reaction was swift, and solar stocks closed sharply lower on Wednesday (see chart).
“The CVD has now been imposed and the affected manufacturers will have to challenge it at the appropriate appellate forum,” MNRE Secretary Santosh Kumar Sarangi told reporters. “Generally, such duties continue until overturned through legal process. From the embassy perspective, support is extended, but the recourse lies with the companies.”
Industry sources await clarity on whether the CVD would apply only to cells manufactured in India or to all products exported from India, including those where only assembly was carried out in the country, industry sources said. In the former case, the new tariffs could potentially undermine India’s efforts to indigenise solar production by cutting import dependence.
In a fact sheet, the US Commerce Department said the duties were imposed to offset what it termed “unfair subsidies” provided by exporting nations. The subsidy rates were fixed at 125.87% for India, 104.38% for Indonesia and 80.67% for Laos, following a petition filed by the Alliance for American Solar Manufacturing and Trade, whose members include Hanwha Qcells, First Solar and Mission Solar.
The department is also preparing a separate ruling next month on whether exporters sold solar products in the US below their cost of production.
Imports of solar panels from India, Indonesia and Laos were valued at around $4.5 billion last year, accounting for nearly two-thirds of total US solar imports in 2025, according to data cited by the Commerce Department.
Beyond the country-wide rates, company-specific duties were calculated at 125.87% for Mundra Solar in India, 143.3% for PT Blue Sky Solar and 85.99% for PT REC Solar Energy in Indonesia, and 80.67% each for Solarspace Technology Sole Co and Vietnam Sunergy Joint Stock Company in Laos.
Industry executives said the ruling strikes at the heart of India’s export-driven solar expansion. “The US market has been the backbone of India’s solar module exports, accounting for nearly 97% of shipments in FY25 and crossing USD 1 billion in value,” said Tushar Bhaskar, Chief Business Officer at Rubix Data Sciences. “At these duty levels, the US market effectively becomes inaccessible. There is a real risk of excess inventory getting redirected into the domestic market, which could create oversupply and pricing pressure.”
Ratings agency ICRA Ltd said the duties and regulatory uncertainty were likely to dampen export volumes and weigh on profitability. “Redirected volumes can exert pricing pressure in the Indian market, which is already oversupplied with manufacturing capacity above 140 GW and expected to cross 165 GW by March 2027, while annual installations are projected at 45–50 GW,” said Ankit Jain, vice president at ICRA.
Meanwhile, Crisil Intelligence pointed to the erosion of India’s cost advantage. “Modules imported from India will now become at least 30% more expensive compared with US-made ones using imported cells, making them commercially unviable,” said Sehul Bhatt, director at Crisil Intelligence, adding that volatile trade patterns are likely until final determinations scheduled for July 2026. The final decision on these tariffs is due to be published on July 6, 2026.
Industry body National Solar Energy Federation of India said the ruling remains a preliminary finding. “The final determination is not expected until July 6, 2026. We remain optimistic that the proposed India–US bilateral trade agreement under negotiation could supersede these duties and restore stability for Indian exports,” said NSEFI CEO Subrahmanyam Pulipaka, adding that allowing solar units in Special Economic Zones to sell into the Domestic Tariff Area would provide manufacturers with a domestic alternative.
Some manufacturers said the immediate impact would be limited. Solar module manufacturer Vikram Solar stated that duties would have a limited impact, as it sources cells for US customers outside India, in countries with lower tariff exposure, while Premier Energies said it had already reduced exports to near zero.
Following the the US announcement, Waaree Energies slid over 10% to ₹2,708.55, Solex Energy fell nearly 8% to ₹883.15, Websol Energy Systems dropped about 7% to ₹56.96, Premier Energies declined more than 6% to ₹729.05, and Vikram Solar eased 5% to ₹175.25. Shares of Saatvik Green Energy and Emmvee Photovoltaic Power also ended lower, reflecting investor concerns over export prospects.
With Washington tightening trade enforcement and final determinations still months away, Indian solar exporters now face a prolonged legal contest and a shift in market strategy.
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