US slaps 126% duty on Indian solar imports: What happened, who’s affected, and what comes next?

Indian exports of solar cells and modules to the US face a major setback after the US Department of Commerce on Tuesday imposed a preliminary countervailing duty of nearly 126% on shipments from India.

The countervailing duty was announced after its trade authority made a preliminary finding that Indian manufacturers received unfair government subsidies.

The steep duty could sharply curb America-bound sales from one of India’s fastest-growing clean energy manufacturing segments.

The decision, announced on February 24, is part of countervailing duty (CVD) investigations into crystalline silicon photovoltaic cells imported from India, Indonesia and Laos.

Under the preliminary findings, Indian exporters, including Mundra Solar Energy Ltd and Mundra Solar PV Ltd, have been assigned a uniform subsidy rate of 125.87%.

The rate for “all other” Indian producers has also been set at the same level, based on what the Department of Commerce termed “facts available with adverse inferences”.

Indonesia and Laos have also been hit with high preliminary subsidy margins, ranging from about 80% to over 140% for selected exporters.

What is a countervailing duty?

A countervailing duty is imposed to offset subsidies provided by foreign governments that allegedly give exporters an unfair pricing advantage in the importing country.

In this case, the Department of Commerce will instruct US Customs and Border Protection to begin collecting cash deposits on Indian solar imports at the preliminary rate once the decision is published in the Federal Register.

Who pushed for the probe?

The case was filed by the Alliance for American Solar Manufacturing and Trade, whose members include South Korea’s Hanwha Q CELLS., Arizona-based First Solar Inc. and San Antonio-based Mission Solar Energy LLC, which is owned by Korea's OCI Holdings.

The alliance’s lead attorney, Tim Brightbill, said the decision marked “an important step toward restoring fair competition”.

"American manufacturers are investing billions of dollars to rebuild domestic capacity and create good-paying jobs. Those investments cannot succeed if unfairly traded imports are allowed to distort the market," he said in a statement.

Why does this matter for India?

The US has emerged as a key export destination for Indian solar manufacturers in recent years.

According to official data, US imports of Indian solar cells and modules surged from about 232 million watts in 2022 to over 2.29 billion watts in 2024.

The shipment values jumped from nearly USD 84 million to about USD 793 million.

The steep provisional duty could now price Indian products out of the US market, at least temporarily, adding pressure on manufacturers that have invested heavily in new factories under India’s production-linked incentive (PLI) schemes.

What happens next?

The Department of Commerce is expected to issue its final determination on July 6, 2026, unless the timeline is extended.

The department is also conducting parallel antidumping (AD) investigations into solar cell imports from the three countries, while the US International Trade Commission is examining whether the imports have caused injury to the domestic industry.

If both the Department of Commerce and the ITC deliver affirmative final rulings, the US will impose definitive duties on the imports.

Could the rates change?

Yes. The findings that have been issued are preliminary, according to the FAQs published by the Department of Commerce.

“Interested parties have the opportunity to comment on the preliminary determination and the verification reports, and participate in a public hearing, if requested,” it said.

As a result, the final rates could be higher or lower than the preliminary figures.

Solar energy stocks

Shares of solar energy companies such as Waaree Energies, Premier Energies, and Vikram Solar declined sharply on Wednesday, February 25.

Waaree Energies tumbled as much as 14.2% to ₹2,591.1 on the NSE. Premier Energies shares were also down 10% at ₹699.35 apiece on the NSE.

Vikram Solar shares plummeted over 7.5% lower to ₹171 apiece on the NSE in the early trade.

Reports suggest that Waaree Energies and Vikram Solar have meaningful export exposure to the US market.

A CNBC-TV18 report noted that Waaree Energies has nearly 29% export exposure, while Vikram Solar derives around 16% of its revenue from exports.