SINGAPORE/NEW DELHI: High U.S. tariffs and potential anti-dumping duties on Indian solar panel exports will exacerbate a supply glut in India next year as domestic project bidding slows, according to industry officials and analysts.
U.S. President Donald Trump’s 50% tariffs on shipments from India will choke panel sales to its top overseas market, which accounts for 90% of module exports, they said.
The situation could deteriorate further if anti-dumping duties are imposed on some manufacturers following a petition filed on July 17 by U.S. solar companies with the Commerce Department seeking duties on imports from India, Indonesia, and Laos.
“The 50% tariff will squeeze margins, and potential anti-dumping duties will make competing in the U.S. even tougher,” said Raj Prabhu, CEO of clean energy consultancy Mercom Capital.
India’s awards of solar generation projects and new tenders slowed dramatically in the quarter ended June, with an adviser to the federal power ministry urging renewable developers to bid cautiously in line with demand growth projections.
“We expect that India will enter overcapacity stage already in 2026, which will feel even worse with the loss of the U.S. market,” said Wood Mackenzie analyst Yana Hryshko.
India says knock-on impact of US tariffs poses economic challenges
New Delhi’s incentives — including import duties and domestic manufacturing mandates — helped double module production capacity annually to 74 gigawatts by March. State Bank of India Capital Markets projects this will reach 190 GW by 2027.
India’s solar module factories are already running at only 25% of total capacity on average, said Vinay Rustagi, chief business officer of manufacturer Premier Energies.
“Some companies are running at 80%-85% like us, others are running at much lower capacity,” he said.
China cell imports
If anti-dumping duties are imposed, Indian manufacturers must either find alternative markets or supply domestically, Hryshko noted.
Finding new markets will be challenging. Indian solar modules made using Chinese cells are 48% more expensive than China-made modules, while those using Indian cells are roughly 143% more expensive, Mercom data shows.
India has capitalised on an 82% decline in prices of Chinese cells since late 2022 and steadily boosted exports of modules, energy think-tank Ember said.
The local solar module manufacturing push has helped companies such as Waaree and Adani increase lucrative U.S. exports. But it has also pushed up solar generation costs, which are passed on to debt-laden power retailers.
India plans to mandate domestic cell use from June 2026, despite these costing over three times more than Chinese alternatives, according to Fei Chen, an analyst at consultancy Rystad Energy.
Analysts say the move may trigger increased Chinese imports before the rules take effect.
“Reliance on cell imports is likely to increase in the short term, potentially leading to stockpiling, price spikes, and supply chain pressures,” Mercom’s Prabhu said.
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