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India's Solar Sector Faces US Tariff Shock, But Sees Strategic Opportunity
Apr 05, 2025
India’s solar manufacturing sector is bracing for impact after the Trump administration’s latest tariff regime hit Indian solar module exports to the US with a 26% duty. This decision throws a wrench into India’s ambitious plans to scale its solar exports, especially as the US has historically absorbed over 90% of India’s solar module exports.
Despite this setback, India’s solar industry remains cautiously optimistic. The country has rapidly grown its manufacturing capabilities, now boasting over 70 GW in solar module and 25 GW in cell capacity, with more expansion in the pipeline. Domestic demand, though increasing, is expected to cap out around 45-50 GW annually, making exports vital for sustaining the industry’s growth.
However, the tariffs aren’t India-specific alone. Southeast Asian competitors face even steeper duties:
- Vietnam: 46%
- Thailand: 36%
- Malaysia: 24%
- Cambodia: 49%
These figures could bolster India’s relative competitiveness in the US market despite its own 26% tariff. Additionally, a 34% tariff on Chinese imports aims to block rerouted shipments from China via Southeast Asia.
Waaree Energies, India’s largest exporter, exemplifies a dual-pronged strategy to mitigate geopolitical risks. It currently operates 13.3 GW of manufacturing capacity in India, set to rise to 16.5 GW, while also running a 1.6 GW facility in the US, which is being expanded to 3.2 GW.
Dr. Amit Paithankar, CEO of Waaree, framed the tariff as a strategic inflection point, emphasizing resilience, supply chain agility, and long-term solar demand. His statement underscores the belief that India’s role in the global clean energy transition remains strong and that local US manufacturing alongside Indian scale production will help weather policy shifts.
India’s continued investment in upstream solar manufacturing—cells, wafers, ingots, and polysilicon—could pave the way for it to become second only to China across the solar supply chain by 2027-28. The new US tariff regime is a setback, but one that may ultimately fuel smarter, more globally integrated strategies for Indian solar players.