The United States has announced a significant countervailing duty on Indian solar imports, potentially impacting India’s burgeoning renewable energy sector and its push for self-reliance in solar manufacturing.

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The US has announced a preliminary countervailing duty of 125.87 per cent on imports of certain Indian solar goods, alleging that these products are unfairly subsidised by New Delhi.

The US has also announced different duties on the imports of ‘Crystalline Silicon Photovoltaic Cells, Whether or Not Assembled into Modules’ from Indonesia and Laos.

“On February 24, 2026, the US department of commerce announced its preliminary affirmative determinations in the countervailing duty investigations of crystalline silicon photovoltaic cells, whether or not assembled into modules (solar cells), from India, Indonesia, and the Lao People’s Democratic Republic (Laos),” a US order has said.

These duties are over and above the 10 per cent tariffs announced by the Donald Trump administration on all countries from February 24.

According to the order, solar imports from India into the US increased to USD 792.6 million in 2024 from USD 83.86 million in 2022.

“Unless postponed, the final determination in these CVD (countervailing duty) investigations are currently scheduled to be issued on July 6, 2026. Commerce (department) is also conducting concurrent anti-dumping duty investigations of solar cells from India, Indonesia, and Laos,” it said.

Countervailing duties help companies to protect them from increase in subsidised imports.

India’s Push for Renewable Energy and Domestic Solar Manufacturing

India is taking a series of measures to promote renewable energy production in the country and reduce its import dependence. Solar energy is one of the key components in this.

India is the world’s third-largest solar power producer.

According to an official statement, India’s solar manufacturing sector includes key components like solar modules, solar PV cells, ingots and wafers. Producing these within the country supports the domestic economy and reduces dependence on imports.

To boost domestic manufacturing, the government has made it mandatory for projects under schemes like the Rooftop Solar Programme, Pradhan Mantri Kisan Urja Suraksha evam Utthan Mahabhiyan (PM-KUSUM) Scheme, and CPSU Scheme Phase-II to use panels and cells made in India.

What India did

India also imposed a basic customs duty in April 2022 on imported solar cells and modules to discourage imports, boost local manufacturing and reduce reliance on foreign suppliers.

Under the Production Linked Incentive (PLI) scheme for manufacturing of high-efficiency solar PV (photo-voltaic) modules, letters of award have been issued for setting up around 48.3 GW of fully/partially integrated solar PV module manufacturing units in the country.

Under the scheme, around 26.6 GW of solar PV modules, 10.5 GW of solar PV cells, and around 2 GW of ingot-wafer manufacturing capacity have been set up.

A total of 55 solar parks of cumulative capacity of 39,973 MW have also been sanctioned under a scheme.

Impact on Solar Imports

Import of solar modules in India dipped to USD 2.15 billion in 2024-25 as against USD 4.35 billion in 2023-24.

The imports from China came down to USD 1.7 billion last fiscal from USD 2.85 billion in 2023-24. The other nations from where India imports include Vietnam, Hong Kong, Malaysia and Singapore.