After Trump 2.0, there was much talk about the US imposing reciprocal tariffs on countries with what the administration calls unfair trade practices. While some industry voices are viewing this as a move to boost domestic manufacturing, others are calling it a recipe for “Mahngai” (Dearness & Inflation)—a rise in prices that could strain industries and consumers alike.
Finally, on Wednesday, President Trump announced what he termed “discounted reciprocal tariffs”—not full, but enough to make a dent. India is not an exception. A 27% tariff has now been imposed on most Indian exports, including solar PV modules.
The US has been one of the biggest buyers of Indian-made solar panels, with shipments valued at around $2 billion in FY24. The new duty could make Indian modules significantly less competitive in the American market, which is already highly price-sensitive.
While energy products like crude oil and critical minerals are exempted from these tariffs, renewable equipment like solar modules are not. That’s where it stings. This sudden cost increase may push US developers to either absorb higher input costs, raising the price of solar projects, or shift sourcing to other countries like Vietnam, which is also impacted, but possibly to a lesser degree.
For Indian manufacturers, the worry is clear. “The tariff makes Indian modules more expensive overnight. This could hurt our US sales pipeline unless some trade balance is negotiated soon,” said a senior executive from a leading solar firm.
However, some experts suggest this may also push Indian manufacturers to pivot further into domestic and Middle East markets or double down on innovation and scale to absorb tariff shocks.
For now, what’s certain is that India’s solar export story to the US faces a cloudy forecast.
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