US Imposes Preliminary Countervailing Duties on Indian Solar Cells, Impacting Gujarat's Export Landscape
The United States government has announced preliminary countervailing duties of up to 126% on solar cells imported from India, a move that has triggered a strategic reassessment among solar manufacturers in Gujarat. This development comes as the global solar industry faces shifting trade dynamics and increasing protectionist measures.
Understanding the Scope of the Duties and Immediate Implications
It is crucial to note that these levies specifically target solar cells manufactured in India, while exempting modules that are assembled domestically using imported cells. Many Gujarat-based exporters have historically sourced cells from countries with lower duty structures and then assembled them into modules locally. As a result, the direct financial impact on these firms may be less severe than the headline duty rates initially suggest.
However, the situation is evolving rapidly. With India tightening its domestic sourcing requirements under the Approved List of Models and Manufacturers (ALMM-II), which mandates the use of domestically produced solar cells for certain projects, the exposure of Gujarat manufacturers to US duties could increase in the future. As firms ramp up integrated cell production capacities to comply with ALMM-II, they may face higher risks from cell-specific tariffs unless they successfully expand into alternative export markets.
Industry Responses and Strategic Adjustments
Industry leaders and experts are actively responding to these challenges. Abhishek Pareek, group head of finance at Waaree Energies Limited, highlighted the company's proactive measures. "Despite earlier duties of 50%, we continued to increase our US shipments during the first nine months of FY26, supported by diversified and alternate supply chains developed over years," he stated. "We are further strengthening our sourcing strategies, including investments in Oman to secure fully traceable, non-Chinese polysilicon supply."
Pareek also emphasized Waaree's commitment to localization in the US market. "As part of our long-term strategy, we are expanding our US manufacturing footprint. Currently, we have an aggregate module manufacturing capacity of about 2.6 gigawatts in the US, including capacity acquired through the Meyer Burger facility. We plan to scale this to approximately 4.2 gigawatts by the end of the current financial year, subject to ramp-up timelines," he added.
Broader Market Dynamics and Expert Insights
Solar energy consultant Jaideep Malaviya provided context on the competitive landscape. "The Production Linked Incentive (PLI) scheme has enabled India to scale up manufacturing and reduce costs, making solar modules more affordable globally. While the US views this as a market distortion, the benefit of competitive pricing is undeniable. Since most exports from Gujarat are modules assembled with imported cells, the near-term impact may not be as severe," he explained.
Malaviya also advocated for strategic trade diversification. "India should accelerate its trade engagement with the European Union to reduce over-dependence on the US market, which is becoming increasingly volatile due to frequent duty changes," he suggested.
Echoing this sentiment, Kunj Shah, chairman of the energy committee at the Gujarat Chamber of Commerce and Industry (GCCI), noted, "The latest duty will primarily impact exports of domestically manufactured cells. With constant shifts in the US duty structure, many manufacturers are now diversifying their export portfolios. Numerous countries are adopting solar energy, presenting vast opportunities for our manufacturers to explore new markets."
Future Outlook and Strategic Imperatives
The convergence of US duties and India's ALMM-II norms creates a complex scenario for Gujarat's solar sector. Analysts warn that as firms enhance their cell production capabilities under domestic policies, their vulnerability to US tariffs could rise unless they successfully pivot to other regions. This underscores the critical need for market diversification and robust supply chain management.
In summary, while the immediate fallout from the US duties may be mitigated by current assembly practices, the long-term strategy for Gujarat's solar manufacturers must involve expanding into new markets, strengthening local production, and navigating international trade policies with agility. The industry's ability to adapt will be key to sustaining growth in an increasingly competitive global environment.
