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US President Donald Trump has imposed a solar import duty of 126% on India, a move that threatens to derail the India-US trade deal.
The US Commerce Department announced the solar import duty after arriving at the conclusion that New Delhi unfairly subsidised domestic manufacturing of solar photovoltaic modules, so much so that they undercut American-made products. Beyond India, the department set initial rates ranging from 86% to 143% for Indonesia and 81% for Laos.
The decision comes barely weeks after New Delhi and Washington agreed on a framework for the India-US trade deal to bring down tariff on India’s exports to 18% from 50% earlier. That was before the US Supreme Court quashed Trump tariffs, calling them unconstitutional. Trump then pivoted to a new 10% baseline duty on most imports, with threats to hike that to 15%.
Now, this latest protectionist pivot suggests that Trump’s “America First” policy remains the priority, even at the expense of strategic trade deals.
Meanwhile, Indian and American officials have postponed a three-day meeting scheduled for this week to discuss the interim trade deal.
The surge in imports from India, Indonesia, and Laos—which accounted for 57% of US solar module imports in the first half of 2025—is largely seen as a bypass for Chinese firms. Facing stiff US barriers, Chinese manufacturers have shifted production across Southeast Asia to maintain market access.
India has been a primary beneficiary of this shift. Solar imports from the country reached $792.6 million in 2024, a nine-fold increase from 2022 levels.
Tim Brightbill, lead attorney for the Alliance for American Solar Manufacturing and Trade, hailed the move as a victory for domestic investment. “Those cannot succeed if unfairly traded imports are allowed to distort the market,” he said.
A lack of viable export markets will force Indian solar PV module makers to push their stocks into the domestic market, resulting in an oversupply.
As of January 2026, India had an installed solar-module manufacturing capacity of more than 160 GW, as against domestic demand of 40-45 GW. India’s solar exports to the US reached $792.6 million in 2024, a nine-fold increase from 2022 levels.
“The preliminary US countervailing duties are a major setback for Indian solar manufacturers that relied heavily on exports to the US market,” Rajan Kalsotra, Senior Consultant at EUPD Research, told Reuters.
“With the US accounting for the overwhelming share of exports, producers now face a dual dilemma of excess capacity and restricted market access.”
🔗 Waaree, Premier scorched as US slaps 126% solar import duty on India
But for US solar firms, the duty represents a significant headwind. By effectively locking out Indian supply, the administration risks driving up project costs at a time when the industry is already grappling with high interest rates and policy uncertainty.
A final determination on the subsidies is expected by 6 July 2026, alongside a concurrent anti-dumping investigation.

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