Experts believe that markets may have overreacted to the US’ move to impose preliminary countervailing duties of up to 126% on solar cell and module imports from India, even as shares fell sharply on February 25. Solar manufacturers and related players declined by around 10% by the close of trade, as investors reacted to the steep headline tariff and rising uncertainty around exports to the US. The Commerce Department is expected to issue a final decision on the subsidy investigation by July 6.
On February 24, US authorities concluded that state-backed incentives in India, Indonesia, and Laos enabled producers to price modules below fair market value, harming domestic solar manufacturers. This came post a petition by the Alliance for American Solar Manufacturing and Trade urging Washington to investigate subsidy practices.
Analysts said that while the development is sentimentally negative and could disrupt export flows in the near term, the direct earnings impact on most companies appears limited.
SBI Securities’ Sunny Agrawal highlighted that management commentary indicated that exposure to domestically manufactured cells exported to the US is minimal.
“As per the current tariff structure, the duty is linked to the origin of the solar cell used in a module exported to the US. Waaree’s management clarified that modules made using domestically manufactured cells are not being exported to the US in any meaningful quantity. At the industry level, exposure of India-made cells exported to the US is extremely small, roughly around 100 MW. So practically, the exposure is minuscule,” he said.
He added that because of that, this duty should not materially impact any particular solar panel company. The larger concern, he said is uncertainty which is driving market reactions. He noted that ,arkets dislike unpredictability. Even if the broader trade framework remains intact, sector-specific tariffs can keep changing. That creates an overhang in the near term.
Smaller US export basket
Elara Securities’ Rupesh Sankhe concurred that exports to the US have already been declining over the past few years. “Exports from India to the US have come down sharply. The current issue is that duties are being imposed on solar cells, which directly affects modules,” he said.
Companies such as Waaree Energies and Premier Energies, which have meaningful US exposure, may shift sourcing strategies if needed.
“As per management commentary, they can source solar cells from countries where duties are lower. Domestically manufactured cells are being used for DCR models ( Domestic Content Requirement). That flexibility is available,” Sankhe said.
He noted that US module realizations are about 46 cents per watt compared to around 33 cents in India. “If duties on India-sourced cells make exports unviable, companies can procure cells from low-duty countries. That becomes the practical route.”
Sankhe added that even if exports reduce further, the volume impact is manageable. “Even if we assume 5 GW of exports, India’s annual demand is about 40 GW. So the additional supply can be absorbed domestically.”
Exports have already fallen from around 7–8 GW earlier to roughly 3 GW in the first nine months of the fiscal year, according to industry estimates.
Sehul Bhatt, Director at CRISIL Intelligence, said the duties will negatively affect export-focused manufacturers but are unlikely to derail the broader industry.
“The preliminary countervailing duties announced by the United States Commerce Department on solar cells and modules imports from India will have a negative impact on export-focused manufacturers. India exported cells and modules worth ~Rs 340 billion to the US between April 2023 and November 2025. This was supported by lower cost of Indian modules compared with those made in the US, both using imported cells, an advantage the duties will erode,” Bhatt said.
He added that the US accounts for over 95% of India’s solar cell and module exports in recent quarters, and modules from India could become at least 30% more expensive than US-made ones if duties persist.
However, Bhatt noted that some Indian companies have already planned overseas expansions amid tariff uncertainty, cushioning part of the risk. Final duty rates are scheduled for determination in July 2026, and trade flows may remain volatile until then.
Motilal Oswal in its latest report added,"From a broader industry perspective, India’s solar cell manufacturing capacity stands at around 27 GW under ALMM-II, compared with module manufacturing capacity of 162 GW under ALMM-I. However, cell capacity is still in the ramp-up phase and is largely geared toward meeting rising domestic demand. Given the current expansion trajectory, surplus cell capacity available to meaningfully support exports is likely to remain limited at least until FY28."
Among listed players, Vikram Solar has relatively lower export exposure, while Waaree remains the largest exporter. Overall, analysts said no single company appears significantly better insulated at this stage, as most players operate within similar industry dynamics.
Domestically, demand remains robust, with India adding 1.5–2 GW of solar capacity every month. However, rising competition may exert pricing pressure over time.
Wait and watch for investors 
As for whether this is a buy-the-dip opportunity or a wait-and-watch phase, most experts agree that it would be better for investors to wait and watch despite today's correction and possible continued impact over the next few days. “A few weeks of stability and clearer guidance would help,” Agrawal said. Until there is clarity on final duty rates and sourcing adjustments, volatility in solar stocks is likely to persist, even as the structural demand outlook in India remains intact.
Mutual funds have modestly reduced their exposure to US-exposed solar names over the last few quarters. An analysis of data on Waaree Energies Limited, Premier Energies Limited, Tata Power and Adani Green Energy Limited showed aggregate holdings declining about 7% from roughly Rs 6,900 crore in the September quarter to around Rs 6,400 crore in the December quarter. The trimming, which began before the latest US. solar import duty announcement, reflects valuation-led consolidation and selective profit-booking rather than a structural exit from the renewable energy theme, experts say.
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