Indian solar stocks experienced severe declines following the US announcement of heavy countervailing duties on solar imports. Waaree Energies slid over 10% to ₹2,709 (the sharpest among peers), while 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. According to The Economic Times, Waaree Renewable Technologies fell 3% and Solex Energy, maker of solar photovoltaic (PV) modules and EPC services provider for solar projects, plunged 8% on Wednesday. The US is an important export market for several Indian solar companies, with the three countries together accounting for about $4.5 billion worth of solar imports into the US last year, making this decision significant for exporters. As per The Financial Express, 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.
The US imposed a countervailing duty of up to 126% on solar module exports from India, Indonesia and Laos over alleged subsidies that rendered American products less competitive. According to reports from The Times of India, Santosh Kumar Sarangi, secretary in the ministry of new and renewable energy, stated that the Centre does not provide subsidies to local manufacturers and no disbursements have been made under the production-linked incentive (PLI) scheme. Sarangi noted that until a review of the countervailing duty is conducted, Indian exporters will have to navigate the new trade environment. The duties were imposed following a petition filed by the Alliance for American Solar Manufacturing and Trade, whose members include Hanwha Qcells, First Solar and Mission Solar. The US Commerce Department said the duties were imposed to offset what it termed "unfair subsidies" provided by exporting nations, with subsidy rates fixed at 125.87% for India, 104.38% for Indonesia and 80.67% for Laos. The department is also preparing a separate ruling next month on whether exporters sold solar products in the US below their cost of production.
The punitive duties stem from Adani Group companies' failure to cooperate with a subsidy investigation, with Mundra Solar Energy and Mundra Solar PV withdrawing from investigation proceedings and triggering the 'Adverse Facts Available' penalty, the most stringent methodology applied by the US Department of Commerce. The investigation, initiated by the Alliance for American Solar Manufacturing and Trade, also examined various Indian export-linked subsidy programs, including the Advance Authorisation Program and Duty Drawback Scheme, alleging these provided unfair advantages. This action follows a significant nine-fold increase in Indian solar exports to the US to $792.6 million in 2024, with over 90% of India's module exports directed to the US between 2021 and 2024. The situation is compounded by past US tariffs on solar imports from Southeast Asian nations, which previously caused supply chain shifts and subsequent increases in Indian exports to the US.
The US government's move to impose preliminary countervailing duties of up to 126% on solar cells imported from India has prompted strategic recalibration among Gujarat's solar manufacturers. According to Ahmedabad News, the levies apply to solar cells manufactured in India and not to modules assembled domestically using imported cells, meaning several Gujarat-based exporters who source cells from low-duty countries and assemble modules locally face a narrower direct hit than headline rates suggest. However, with India tightening domestic sourcing norms under ALMM-II and encouraging local cell production, future export exposure could rise. Industry experts say the development underscores the need for market diversification as firms in hubs such as Mundra and Dholera weigh a shift in export strategy. This strategic pivot comes as the US government's move to impose preliminary countervailing duties of up to 126% on solar cells imported from India creates new challenges for established solar manufacturing hubs.
The imposition of countervailing duties is set to impact not just exporters but also companies focusing on the domestic market. Companies with minimal or no exports to the US will also be impacted by CVD. They face indirect risk, if export volumes from peers are redirected to India, according to Sweta Jain, research analyst at Anand Rathi Institutional Equities as reported by The Economic Times. Increased domestic supply could pressure module realisations, she added. Indian exports may also look at other alternative markets in Africa or the Middle East and North Africa region, as reported by Mint. Companies rely on the US due to higher realisations, and imposition of CVD will wipe out the price advantage that previously allowed Indian manufacturers to earn superior margins. Inventory glut could hit local business, with analysts noting that exporters are likely to redirect unsold inventory to the Indian market, potentially bringing down module prices and affecting realisations.
Industry players said they will have to scale up domestic supply in the near term and look for alternative markets in the long run. As reported by The Financial Express, India exported cells and modules worth nearly ₹340 billion to the US between April 2023 and November 2025. According to Crisil Intelligence, this was supported by the lower cost of Indian modules compared with those made in the US, both using imported cells - an advantage the duties will erode. 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. 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. Solar imports from India rose nearly ninefold from $84 million in 2022 to $792.6 million in 2024, highlighting the rapid growth in this sector before the duty implementation.
The US is actively bolstering its domestic solar manufacturing capabilities, creating a direct contrast with challenges faced by Indian exporters. As of October 2025, the US possessed over 60 GW of solar module manufacturing capacity, a 37% increase since December 2024, with additional capacity under construction. The nation now has the capability to produce every major component of the solar supply chain, from ingots and wafers to cells and modules. This expansion is supported by government incentives and a strategic push for energy independence, aiming to reduce reliance on foreign supply chains. The US solar cell production capacity has reportedly tripled since late 2024, with the U.S. Department of Commerce's stance on non-compliance serving as a testament to protecting domestic industries. This domestic growth narrative directly contrasts with the challenges faced by Indian exporters, framing the tariffs as a measure to protect and promote American-made solar products.
Indian solar manufacturers have lined up ₹30,000 crore in investments for FY27 to establish approximately 50GW of cell manufacturing capacity. As reported by Mint, currently India has 30GW of cell manufacturing capacity. However, concerns of oversupply have been raised, with ICRA warning of potential industry overcapacity as annual solar module production of 60-65GW is expected to outpace annual installations of 45-50GW direct current. Ankit Jain, vice president at ICRA, said 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 45–50GW. Tarun Padhi, senior VP - operations at Datta Power Infra Private Limited, said the impact may vary, as many domestic players import cells from low-duty countries and assemble panels in India for export. Waaree Energies tried to soothe investors' nerves by saying the company's exports will not be impacted by CVD, stating that it has been progressively strengthening its US-based manufacturing footprint as part of its long-term strategy to support localized production. It has an aggregate US module manufacturing capacity of approximately 2.6 GW, which will be expanded to approximately 4.2 GW by the end of the current financial year, with a total installed capacity of 23 GW at the end of December 2025.