The United States has imposed a 123% anti-dumping duty on Indian solar imports, sharply increasing pressure on major exporters from Gujarat. Combined with existing countervailing duties of 125%, the total tariff burden on Indian solar exports to the US now exceeds 200%. This move has intensified concerns across Gujarat's solar manufacturing sector, which is already facing an oversupply situation amid tapering exports. Industry players said that domestic demand remains strong, but is not growing fast enough to match supply and installed capacity.
Impact on Gujarat's Solar Sector
Putting this in perspective, an official from the India Energy Storage Alliance (IESA), requesting anonymity, said, "Exports have clearly taken a hit amid a global oversupply situation and tightening trade barriers. With export avenues narrowing, some of that surplus is now flowing into the domestic market, which is beginning to absorb capacity as local solar demand picks up. Renegotiation is emerging as the only practical way forward, particularly for short-term contracts, while long-term agreements are likely to remain relatively insulated."
Echoing a similar view, Kunj Shah, chairman of the renewable energy committee at Assocham Gujarat State Council, said, "Larger players with higher exposure to the US are likely to feel a sharper impact as the competitiveness of Indian solar exporters will be hurt. In other international markets too, gaining a foothold at scale remains challenging due to intense competition from China. Against an estimated domestic demand of around 40 GW, India's declared manufacturing capacity has reached nearly 160 GW, with more in the pipeline. This mismatch means domestic demand is not growing in tandem with capacity addition, putting pressure on manufacturers to recalibrate strategies."
Domestic Demand as a Buffer
Industry experts maintain that the downside risk is likely to be contained. India's accelerating renewable energy ambitions, including aggressive capacity addition targets, government-backed incentives such as the production-linked incentive scheme, and rising demand across utility-scale and rooftop segments are creating a strong domestic absorption base. Pathik Patwari, chairperson of the Indian Chamber of Commerce (ICC) Gujarat, said, "Gujarat, which has emerged as a key hub for solar manufacturing with integrated facilities spanning polysilicon to modules, is witnessing steady demand from developers executing large-scale projects. The state's industrial and commercial segments are also increasingly adopting solar solutions to manage energy costs and sustainability mandates."
Despite the challenges, the domestic market is expected to absorb a significant portion of the surplus solar capacity. However, the industry remains cautious about the long-term implications of the US tariffs, which could reshape trade dynamics and force Indian manufacturers to explore alternative markets or diversify their product offerings.
