US Imposes 126% Tariff on Indian Solar Modules, Shuts $793M Market
The US Department of Commerce imposed a 126% preliminary countervailing duty on Indian solar cells and modules, effectively barring exports to the $793 million US solar market and squeezing India’s 160 GW manufacturing capacity. Petitioners including First Solar accused Indian firms of unfair subsidies under PLI and EPCG schemes.
1. US Tariff Imposition and Scope
The US Department of Commerce imposed a 126% preliminary countervailing duty on Indian solar cells and modules, effectively barring their entry into the US and targeting imports that rose from $84 million in 2022 to $793 million in 2024.
2. Petitioner Allegations and First Solar Role
The Alliance for American Solar Manufacturing and Trade, which includes First Solar and Mission Solar, filed the complaint alleging Indian firms received unfair state support through the Advance Authorisation Program, Duty Drawback Program and the EPCG Scheme.
3. India’s PLI Scheme and Export Growth
India’s production-linked incentive scheme, launched in April 2020, provides 4–6% of incremental sales as incentives, driving a 13-fold increase in solar manufacturing capacity to 160 GW against annual domestic demand of 45–50 GW.
4. Market Impact on Manufacturers
The tariffs are likely to redirect US demand toward domestic and non-Indian suppliers, benefiting First Solar’s competitive position while exacerbating overcapacity risks and prompting potential appeals from Indian solar producers.