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India’s solar module exports to the United States have witnessed a sharp decline following tariff actions imposed by the Trump administration.
According to a Climate Risk Horizons report, Tariff Wars: A Strategic Opportunity For Indian Solar, solar exports declined by approximately 35 per cent after tariffs were introduced in August 2025. Export values fell from USD 134 million in August to about USD 80 million in September, reflecting immediate market disruption.

The US, which accounted for nearly 95 percent of India’s solar module exports despite representing only about 7 percent of its total imports, has historically been India’s dominant export destination. This concentration risk has now translated into volatility for Indian manufacturers.
The imposition and subsequent escalation of tariffs have significantly impacted pricing dynamics. Tariffs increased from around 14 percent pre-2025 to 50 percent by August 2025, and later surged to 126 percent in February 2026.

As illustrated in the pricing trend in the report, module prices for Indian exports to the US rose from approximately INR 25,000 per kWp to nearly INR 49,500 per kWp due to tariff pressures.
This sharp increase has reduced the competitiveness of Indian modules in the US market, leading to a steep decline in demand.
Indian manufacturers have historically relied on exports to developed markets due to higher profitability. Modules exported to the US offered margins estimated to be 40 percent to 60 percent higher than those sold domestically.
While domestic module prices averaged around INR 15,000 per kWp, export prices in the US reached nearly INR 25,000 per kWp before tariff escalation.
This margin differential explains the industry’s heavy export orientation, which is now being challenged by geopolitical trade actions.
India’s solar manufacturing capacity has undergone a rapid increase in recent years. The country added approximately 81 GW of manufacturing capacity in 2025 alone, taking total capacity to around 144 GW.
By 2030, module capacity is expected to reach 160 GW, while cell capacity could grow to 120 GW. However, upstream segments such as wafers and polysilicon remain underdeveloped, with capacities below 3 GW currently.
This imbalance highlights a critical gap in India’s solar value chain.
The report emphasises the need for Indian manufacturers to diversify export markets beyond the US. Regions such as the European Union present potential opportunities, particularly as Europe seeks to reduce dependence on Chinese imports, which currently account for about 98 percent of its solar panel supply.
Some Indian companies have also begun setting up manufacturing bases in the US to mitigate tariff risks. For instance, Waaree has already established a 1.6 GW facility in the US and plans further expansion.
The report identifies domestic solar deployment as a key strategy to absorb excess manufacturing capacity and reduce export dependency.
India needs to install around 50 GW of renewable energy annually to meet its 2030 targets. In 2025, the country installed approximately 35 GW of solar and 6 GW of wind capacity, indicating strong growth momentum.
However, more than 40 GW of projects remain stalled due to unsigned power sale agreements, highlighting execution challenges that need urgent resolution.
Policy measures such as reducing GST on solar panels from 12 percent to 5 percent are expected to improve project economics and accelerate deployment.
Heavy industries present a significant untapped source of renewable energy demand. Under existing regulations, these sectors are required to source around 30 percent of their electricity from renewable sources.
If leading industrial players meet their renewable purchase obligations, it could generate approximately 19 billion units of annual demand. Full decarbonisation of their electricity consumption could increase this to 89 billion units, requiring an additional 10 GW to 50 GW of renewable capacity.
Despite strong module manufacturing capacity, India remains heavily dependent on imports for upstream components such as wafers, ingots, and polysilicon.

China dominates more than 90 percent of these segments globally. The report suggests that without significant investments in upstream manufacturing before 2028, India’s solar ambitions could face constraints.
Expanding domestic demand could incentivise investments in these segments and support vertical integration.
Scaling up renewable energy deployment could also reduce India’s reliance on coal imports.
India imported about 30 percent of its coal requirement for electricity generation in 2023–24, costing approximately USD 21 billion. A reduction in coal demand has already demonstrated significant forex savings, with INR 60,682 crore saved in FY 2024–25 following an 8 percent drop in thermal coal demand.
The report estimates that an additional 236 GW of renewable capacity would be required to eliminate thermal coal imports.
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