Trump administration announced preliminary countervailing duties of 126% (specifically 125.87%) on solar imports from India.
The move is part of a broader crackdown on solar cells and panels from South and Southeast Asia, also hitting Indonesia (86%–143%) and Laos (81%). The U.S. Commerce Department determined that these countries are “unfairly subsidizing” their solar manufacturing sectors, allowing them to undercut American-made products.
Why 126%? The “Chinese Bypass” Allegation
The investigation, initiated by the Alliance for American Solar Manufacturing and Trade, alleges that Chinese manufacturers have been shifting their production to India, Indonesia, and Laos to bypass existing U.S. tariffs.
- Market Surge: India, Indonesia, and Laos collectively accounted for 57% of all U.S. solar module imports in the first half of 2025.
- India’s Growth: Solar imports from India grew nine-fold between 2022 and 2024, reaching nearly $800 million.
- The “Subsidy” Claim: The 126% rate is designed to “offset” the financial benefits Indian firms receive from the government, which the U.S. argues creates an unlevel playing field.
Impact on Indian Solar Stocks
The announcement caused an immediate sell-off in the Indian renewable energy sector on Wednesday, February 25:
| Company | Stock Impact (Feb 25) | Export Exposure to U.S. |
| Waaree Energies | -14.2% (Intraday low) | High (approx. 29% of revenue) |
| Premier Energies | -10.5% | Low (mostly domestic) |
| Vikram Solar | -7.5% | Moderate (approx. 16–20% of order book) |
Note: Waaree Energies management clarified that their expanding U.S. manufacturing footprint (4.2 GW capacity) serves as a “natural insulation” against these import duties, as panels made within the U.S. are not subject to the tariffs.
Collision with the “India-US Trade Deal”
The timing of these tariffs is particularly sensitive. Just weeks ago, in early February 2026, the U.S. and India had agreed on a “land-mark” interim trade deal that was supposed to lower tariffs on Indian exports to 18%.
- The Standoff: This 126% solar-specific duty is a “sectoral” penalty that operates independently of the broader 10–15% global tariffs recently reimposed by Trump following a Supreme Court ruling.
- Diplomatic Fallout: Indian and American officials have reportedly postponed a high-level meeting scheduled for this week to discuss the implementation of the trade pact, as New Delhi seeks clarification on how these new duties align with the recent “deal signals.”
What’s Next?
- Anti-Dumping Probe: A separate decision is expected in March 2026 to determine if these countries are “dumping” panels (selling below the cost of production), which could lead to additional penalties.
- Final Determination: The final ruling on these 126% duties is currently scheduled for July 6, 2026.
- Domestic Glut: Analysts warn that if the U.S. market becomes “effectively sealed off,” Indian manufacturers may be forced to dump excess stock into the domestic market, potentially crashing local prices for solar installations in India.
