Winning Bizness Desk
Mumbai. The United States has imposed an initial countervailing duty of 126% on solar panels and cells imported from India, alleging that Indian manufacturers benefit from unfair government subsidies that hurt American companies. The decision was announced by the US Department of Commerce following a preliminary investigation. Washington has also claimed that some Chinese firms are routing cheaper exports through India to avoid existing US tariffs on China.
Impact on Indian solar exports
The preliminary order has sent shockwaves through India’s fast-growing solar export sector. Industry executives say a 126% duty will more than double the landed price of Indian solar modules in the US, making them largely uncompetitive.
Key concerns flagged by exporters include:
* A sharp rise in module prices for American buyers
* Loss of long-term supply contracts
* Shift in demand toward US domestic suppliers
* Possible diversion of exports to Europe and other markets
According to BloombergNEF, India, Indonesia and Laos together accounted for 57% of US solar module imports in the first half of 2025. India alone exported solar products worth 792.6 million dollars, around Rs 7,200 crore, to the US in 2024. This was nearly nine times higher than its export levels in 2022, reflecting how crucial the US market has become for Indian manufacturers.
Preliminary findings and next steps
The Commerce Department clarified that the 126% duty is based on initial findings. A final ruling is expected on July 6. If the subsidy allegations are upheld, the duties will become permanent. Under the same probe, Indonesia faces a duty of 143%, the highest among the three countries under scrutiny, while Laos has been hit with an 81% duty.
Separately, the department is also examining anti-dumping charges. It is investigating whether companies from India, Indonesia and Laos are selling solar cells in the US at prices below cost. The International Trade Commission is reviewing whether such pricing practices are causing injury to domestic manufacturers.
Separate from Trump’s global tariff policy
The new countervailing duties are distinct from the 10% global tariffs recently reintroduced by US President Donald Trump. The global tariff framework had earlier been struck down by the US Supreme Court, leading to uncertainty in trade policy. The latest move adds another layer of unpredictability for the renewable energy industry, which depends heavily on stable cross-border supply chains.
Allegations of Chinese routing through Asia
American solar manufacturers have alleged that Chinese companies are routing their products through India, Indonesia and Laos to bypass existing US tariffs on China. Earlier, similar claims were made about Vietnam, Malaysia and Thailand before production allegedly shifted to other Asian countries.
Analysts say that with tariffs as high as 126%, the US market is almost closed to Indian exporters. Vikram Bagri of Citigroup Inc. noted that such steep duties leave little room for Indian suppliers to compete on price. At the fag end of the controversy, the Alliance for American Solar Manufacturing and Trade, which had petitioned for the probe, welcomed the move. Its chief counsel Tim Brightbill said the decision was vital to restore fair competition, adding that US manufacturers are investing billions of dollars to expand capacity and create jobs.
