Key points
- The U.S. Department of Commerce has imposed a preliminary countervailing duty (CVD) of 125.87% (roughly 126%) on certain Indian solar imports, alleging government subsidies gave exporters an unfair competitive advantage.
- This duty applies to crystalline silicon photovoltaic cells and modules imported from India — India’s solar exports to the U.S. were valued at about $792.6 million in 2024.
- The duty is preliminary; a final determination is expected by July 6, 2026, and the U.S. is also conducting anti-dumping investigations of the same imports.
- The move affects over two-thirds of total U.S. solar imports and comes amid ongoing U.S.–India trade tensions.
What the new 126% duty means
US announces 126% duty: In a major trade action, the United States has slapped an exceptionally high countervailing duty on solar products imported from India, joining similar measures on imports from Indonesia and Laos. The U.S. Commerce Department’s decision — rooted in allegations that government support gave foreign manufacturers an edge over domestic producers — could dramatically raise the cost of Indian solar panels and cells sold in the U.S. market.
Under the preliminary findings, Indian exports of crystalline silicon photovoltaic cells and modules will face duty deposits at around 125.87%, meaning new Indian shipments to the U.S. could effectively more than double in price. The decision follows a petition by domestic solar manufacturers who argue subsidized imports undercut U.S. producers and threaten planned investment in local production.
Impact on Indian industry & global solar trade
India’s solar sector — buoyed by strong manufacturing capacity — has been growing rapidly, with the United States a top export destination. However, the steep duty threatens to erode the cost advantage Indian exporters have enjoyed, potentially rendering many existing and future U.S. contracts commercially unviable.
The duties also come at a time when global supply chains are already shifting due to previous U.S. trade actions that hit Southeast Asian producers. With solar imports from India previously serving as a key source for U.S. developers, developers and traders face higher costs and disrupted sourcing patterns, which could slow certain renewable energy deployments.
What’s next — timeline & negotiations
- July 6, 2026: Final decision expected on countervailing duties.
- Concurrent anti-dumping probe: A separate investigation could result in additional tariffs if dumping is found.
- Industry response: Indian exporters are exploring diversification strategies and some plan to expand local U.S. manufacturing to reduce tariff exposure.
Bottom line
The US announces 126% duty on Indian solar imports marks a significant escalation in trade tensions between the world’s two large democracies. For Indian exporters, this duty clouds future access to the U.S. market and may require tactical shifts in supply chains or production location. For U.S. policymakers and renewable developers, the action underscores the delicate balance between protecting domestic manufacturing and keeping solar input costs manageable in a clean-energy era.