India will not intervene on behalf of solar module exporters after 126% US levy, says top official

The Centre is unlikely to intervene on behalf of Indian companies after the US imposed a countervailing duty of 126% on Indian solar module exports, said a top official, adding that manufacturers can take legal recourse and appeal at the appropriate forum.

The US announced a preliminary countervailing duty (CVD) of 125.87% on imports of certain Indian solar equipment, alleging that the products are unfairly subsidized by the Indian government. Washington also announced different duties on the imports of ‘crystalline silicon photovoltaic cells, whether or not assembled into modules’ from Indonesia and Laos.

Indian exports have already been impacted by high US tariffs, and are largely focusing on the domestic market, which is already grappling with oversupply. However, the recent interim trade deal framework and the US Supreme Court striking down the hefty tariffs raised hopes for easing the situation. India exports around 3 gigawatts (GW) of solar modules annually.

“Once the CVD has been imposed, you will have to legally fight only. So, companies will have to challenge that in the appellate forum, but until then this will continue, this 126% which has been imposed… Indian government, of course, is not in the picture,” Santosh Kumar Sarangi, secretary in the ministry of new and renewable energy (MNRE), told reporters on Thursday. “It’s basically the affected parties which will counter. But generally from the embassy perspective, support is provided.”

According to Ankit Jain, vice president & co-group head-corporate ratings at Icra Ltd, countervailing duties and the growing regulatory uncertainty in the US are likely to dampen export volumes from India. The move will potentially exert “pricing pressures” on domestic original equipment manufacturers, and “can impact the profitability of the solar module manufacturers”, Jain said.

This development comes when the market is already anticipating an overcapacity of modules in the country.

“If these volumes are redirected back to India, it can result in pricing pressure in the Indian market, which is already oversupplied with solar module manufacturing capacity at more than 140GW as on date, which is expected to increase to over 165GW by March 2027,” Jain said.

Amid concerns about oversupply, the MNRE cautioned banks and non-banking financial companies (NBFCs) last December against unregulated lending to solar module manufacturers.

The ministry informed the Department of Financial Services and non-bank lenders, including Power Finance Corp., REC Ltd and Indian Renewable Energy Dev Agency Ltd, the status of installed domestic manufacturing capacities across solar modules and upstream stages like solar cells, ingots-wafers, polysilicon as well as ancillary equipment like solar glass and aluminium frames, the ministry said in a December statement. The move is aimed at ensuring that financial institutions can “adopt a calibrated and well-informed approach while evaluating proposals for financing any manufacturing facility in the solar PV manufacturing sector and explore and expand their solar PV manufacturing portfolio to the upstream stages, it said.

Inda’s local manufacturing of solar modules aligns with the government’s ambitious target of 500 GW of non-fossil energy capacity by 2030.

Mint recently reported that Indian solar equipment makers, including the country’ largest solar module firm Waaree Energies, Adani Solar, Reliance Industries Ltd, ReNew Energy Global plc, Brookfield and PTT backed Avaada Group and Premier Industries are lining up ₹ ₹30,000 crore solar cell play for creating new 50GW capacity in the next financial year (FY27) to leverage localization norms.

This comes in the backdrop of an Approved List for Models and Manufacturers (ALMM) for solar cells, intended to curb Chinese imports, which is set to come into effect from June this year. That will make it mandatory that only specific models from approved manufacturers can be sourced for government-supported schemes and projects from where electricity discoms procure electricity.