The United States Department of Commerce has imposed a preliminary countervailing duty of 126 percent on solar imports from India.
The decision follows the withdrawal of two Adani Group companies from an anti-subsidy investigation, resulting in the application of the highest penalty methodology, according to The Indian Express.
The move comes as India’s solar module manufacturing capacity has rapidly expanded, with exports to the US valued at $792.6 million in 2024 and over 90 percent of India’s solar photovoltaic module exports shipped to the US between 2021 and 2024.
According to the report, the US Department of Commerce’s order dated 20 February 2026 cited the non-cooperation of Adani Group’s Mundra Solar Energy and Mundra Solar PV as the reason for the steep tariffs.
The companies, designated as ‘mandatory respondents’, withdrew from the investigation, triggering the ‘Adverse Facts Available’ penalty, which is the most severe approach used by the department.
Industry experts noted that the duties and regulatory uncertainty are likely to dampen export volumes from India, which stood at around 3 GW in the last calendar year.
Ankit Jain, Vice President and Co-Group Head at ICRA Limited, stated that the tariffs could exert pricing pressure on domestic original equipment manufacturers (OEMs) and impact the profitability of solar module manufacturers.
The US Commerce Department’s investigation focused on whether Indian solar firms benefited from export-linked and duty-remission programmes, including the Advance Authorisation Program, Duty Free Import Authorisation Scheme, Duty Drawback Program, and Export Promotion of Capital Goods Scheme.
Findings indicated that these benefits, tied to export performance, made the companies particularly vulnerable to countervailing duty findings.
Solar imports from India to the US increased more than nine-fold between 2022 and 2024.
Industry response has been mixed, with some manufacturers stating that the duties will have limited impact on their businesses due to already reduced exports to the US. Vinay Rustagi, Chief Business Officer of Premier Energies, noted that exports to the US have declined by more than 50 percent in 2025 and now represent only 5-7 percent of total Indian production.
“While the immediate focus will understandably be on manufacturers, the real impact will extend beyond export numbers to project execution and the broader economics of the power sector,” said Piyush Goyal, Co-Founder and CEO of Volks Energie.
At the same time, coverage revealed that if export volumes are redirected to the domestic market, pricing pressures could intensify further.
India’s solar module manufacturing capacity is already oversupplied, exceeding 140 GW as of early 2026, with annual solar capacity installations expected to be around 45-50 GWdc.
Middle placement of the tariffs in the global trade context was highlighted by recent US court rulings, which clarified that tariffs are taxes and can only be imposed with express statutory authority from Congress.
This legal context adds further complexity to the ongoing trade measures affecting Indian solar exports.
The US Department of Commerce also pointed to India’s high dependency on Chinese imports for key solar inputs, such as polysilicon and silicon wafers.
As details emerged, investigators examined whether these inputs were supplied at below-market prices, which could further justify countervailing duties under US trade law.
“Going forward, India needs a decisive pivot: aggressively scaling up domestic deployment to accelerate energy transition and cultivate alternative export markets,” said Rishabh Jain, Fellow at the Council on Energy, Environment and Water (CEEW).
End placement of the issue underscored that the US decision follows countervailing duty investigations into crystalline silicon photovoltaic cells from India and other countries, with the potential for further trade actions depending on future cooperation and market developments.
Note: This article is produced using AI-assisted tools and is based on publicly available information. It has been reviewed by The Quint's editorial team before publishing.