Mumbai: Tariff uncertainty and duties in the US have crushed India’s solar module exports, erasing a multi-billion-dollar high-margin export opportunity at a time when India is trying to reduce its trade deficit.
All but one of India’s top listed solar module companies reported nil exports during the quarter ended 31 March. Market leader Waaree Energies Ltd, which had so far managed to protect its exports to the US, also reported fewer outbound shipments during the fourth quarter of FY26.
The companies attributed the decline largely to the tariffs and duties levied by the US, which have surged to upwards of 230%, as per an estimate by an analyst. This includes a preliminary countervailing duty and an anti-dumping duty.
For context, India exported a peak of $2 billion worth of solar modules in FY24, majorly to the US. The North American country has barred module imports from China, becoming one of the few large markets where Indian solar manufacturers were competitive.
“India’s solar export boom to the US is slowing as steep American tariffs erode the profitability that once made the market highly lucrative,” said Sweta Jain, research analyst, Anand Rathi Institutional Equities. “The attraction was the sharp pricing gap,” she said. Indian companies typically made 50-100% higher from US exports than the domestic or global prices, resulting in superior margins, she said.
Modules to the US were supplied at an estimated price of 25-30 cents per watt-peak. The same modules fetch 16-24 cents per watt-peak in India depending on whether they’re made from cells produced domestically or imported, with the former costing more.
The plunge in solar modules exports comes at a time when India’s current account deficit is widening as a falling rupee makes imports more expensive while exports are declining.
Focus on the domestic market
“We will continue to sell in India,” Jugeshinder Singh, the chief financial officer of the Adani Group, said in an Adani Enterprises Ltd (AEL) investor call on 30 April.
Adani New Industries Ltd (ANIL), a subsidiary of AEL, was earlier one of the largest exporters of solar modules from India. It shipped 1.7 gigawatts of solar modules in FY25, accounting for two-fifths of its overall production. Exports nearly halved in FY26 with no overseas sales in the latter half of the year even as overall sales grew on the back of the domestic market.
“And the thing it does – it compresses the margin, but that gain we will make from productivity as we go through this. So, short-term there is slight margin compression, which you will notice in the numbers,” Singh said in the investor call.
Vikram Solar Ltd, another leading solar manufacturer, has about 1 GW of pending orders from the US but supplied nothing in the last fiscal quarter (Q4FY26). The company is working to develop a supply chain that sources cells from North African countries, which could be assembled into modules in India to avoid the US’ crippling tariffs, the company’s management said in an investor call on 8 May.
The company has also scrapped its plans to set up a 3 gigawatt per annum manufacturing line in the US due to stringent regulatory requirements and a shortage of talent.
Similarly, Premier Energies Ltd is also avoiding exports to the US in the current environment. However, the company is keen to set up domestic manufacturing in the US and continues to explore that opportunity, its chief business officer Vinay Rustagi said.
These companies are, instead, focussing on the domestic market, which is also rapidly expanding as New Delhi pushes India’s energy grid towards sources. However, excess production has arrested price growth despite the high demand.
To continue its US exports, Waaree Energies has secured a complex supply chain starting in Africa. The company is sourcing cells from Ethiopia to assemble them into modules in India, which then head to the US, the company said in an investor call on 30 April.
This is because the US levies duties based on the origin of solar cells rather than where they are assembled into modules. However, Waaree’s US-bound shipments in the January-March quarter dipped due to a global shipping logjam caused by the American and Israeli attacks on Iran.
Going ahead, while the company will continue to ship some quantities from India, it plans to rely more on its 4.2 gigawatts of annual solar module manufacturing capacity in the US for participating in the high-margin American market.
and Vikram Solar did not respond to Mint’s request for comment. An Adani Group spokesperson redirected Mint to the company’s latest investor call cited above.
“While alternative supply routes using imported cells from countries such as Ethiopia may still help circumvent the tariff structure and maintain better margins, the US is tightening scrutiny on origin tracing and tariff circumvention, reducing the scope for easy arbitrage,” Anand Rathi’s Jain said.
Alternative markets
Companies are exploring alternative markets like Europe, the Middle East, and Australia, they said in their analyst calls. However, as long as Chinese exports continue to flow into these markets, they remain unviable for Indian companies.
“Other markets such as Europe, the Middle East, Australia and Africa remain open, but none currently offer the same profitability the US once did due to intense Chinese competition and lower pricing spreads,” said Jain.
Premier Energies’ Rustagi said that Chinese players sell below cost in order to win market share. “This makes other key markets like Europe and Middle East unviable at the moment as they are flooded by Chinese manufacturers,” he said.
Ankit Jain, vice-president and co-group head, Icra Ltd, said that the situation was dynamic and has prompted Indian players to search for alternative markets.
“Any favourable changes in these policies by the US can result in resumption of exports going forward. However, if this continues for long, the capacities set up here with US exports in mind will have to find other markets,” he said.