India’s solar expansion faces headwinds from US duty probe

By: Shantanu Bhattacharji

If US access shrinks, India must tap new markets, bolster domestic demand, and seek trade deals—backed by diplomacy to protect its solar ambitions from protectionism.

India’s solar sector has raced ahead in recent years, with manufacturing capacity now crossing 100 gigawatts (GW). Driven by government incentives such as the Production-Linked Incentive (PLI) scheme, which spurred investment in high-efficiency module factories, this milestone positions India as a serious contender in the global clean energy supply chain.

But just as New Delhi is celebrating this milestone, a new challenge is emerging. The US Commerce Department has launched an anti-dumping probe into solar panel imports from India, Indonesia, and Laos. The concern is that these countries might be selling solar modules below fair market value, giving them an “unfair” edge over American manufacturers.

The stakes are high for India. The US is by far India’s biggest solar export destination, buying more than 95 per cent of all panels shipped out since FY23. In fact, Indian exports to the US have grown sharply, driven by Washington’s effort to cut reliance on Chinese products. If anti-dumping duties are imposed, India’s solar exports could suddenly become too costly, eroding their competitiveness.

A Big Win at Risk

Worth mentioning here is that the push into solar manufacturing has been one of its success stories under the “Make in India” banner. From a negligible player a decade ago, India is now among the top five solar module producers globally. The PLI scheme, combined with import restrictions on Chinese panels, created a favourable environment for local manufacturing. Exports, particularly to the US, provided the icing on the cake.

According to government and industry estimates, India’s solar exports have grown more than threefold over the past two years. This growth has also attracted big names such as Reliance, Adani, and Tata into solar manufacturing, with billions of dollars committed to new factories.

However, the US investigation could undermine this momentum. Should duties be imposed, Indian manufacturers might struggle to find alternative export markets quickly. Europe and Africa present opportunities, but neither matches the scale of the US market.

Domestic Impact

At home, the solar industry is already facing a slowdown in project bidding, partly due to rising costs and grid bottlenecks. With limited room to absorb excess production domestically, a hit to exports would worsen the supply glut. Manufacturers could face squeezed margins, delayed capacity expansion, and even potential job losses in the sector.

The timing is particularly delicate, as the country is trying to accelerate its clean energy transition. The government has set a target of 500 GW of renewable energy capacity by 2030, with solar expected to be the backbone. A setback to manufacturing could affect both industrial growth and climate goals.

What Lies Ahead

The dispute also highlights the complexity of global trade in green technology. While the US wants to expand clean energy adoption, it also wants to protect its domestic industry. India, on the other hand, has invested heavily in becoming a trusted supplier of solar equipment. The challenge now is to balance trade frictions with the broader goal of reducing carbon emissions.

If India loses access to the US market, it will need to pivot quickly to other regions, strengthen domestic demand, and possibly explore trade agreements to secure new buyers. Industry insiders say the situation calls for diplomatic engagement, so that India’s solar ambitions do not suffer due to protectionist moves abroad.

For now, the industry is watching closely. A decade of hard-won progress has brought India to the global stage in solar manufacturing. Whether this momentum can withstand the headwinds from Washington will determine the next chapter of the country’s renewable energy journey.