US Imposes 126% Tariff on Indian Solar Exports After Adani Firms Exit Anti-Subsidy Probe

Key Points

The United States has imposed a tariff of 126% on solar cell imports from India following the withdrawal of two Adani Group companies from an anti-subsidy investigation, according to a report by The Indian Express. The US Department of Commerce (DOC) imposed the preliminary duties on 24 February 2026, after determining that India subsidised manufacturing in contravention of World Trade Organization (WTO) agreements.

The investigation began on 7 August 2025, following a complaint by a coalition of American solar manufacturers – the Alliance for American Solar Manufacturing and Trade (AASMT). On 5 September 2025, the probe preliminarily concluded that the US solar industry was “materially injured” by “reason of imports of solar cells from India.”

As part of the probe, several Indian solar manufacturers were being investigated, namely: Premier Energies Photovoltaic Pvt. Ltd., Waaree Energies Ltd. and Waaree Solar Americas, and Mundra Solar Energy Pvt. Ltd. and Mundra Solar PV Ltd. – both part of the Adani Group.

An order by the DOC from 20 February 2026 cites the non-cooperation of Mundra Solar Energy and Mundra Solar PV as the basis for the 126% duty. According to The Indian Express, the report stated: “We preliminarily determine that these non-responsive mandatory respondents (i.e., Mundra Solar Energy and Mundra Solar PV) withheld necessary information that Commerce requested, failed to provide information within the established deadlines, and significantly impeded this proceeding by failing to respond to Commerce’s Initial Questionnaire, either in whole or in part, by the applicable deadline.”

This prompted an application of the DOC’s severe “Adverse Facts Available” penalty on the parties, imposing a preliminary rate of 125.87%. Though specifically naming the Adani entities, the rate currently applies to all Indian exporters not individually investigated. The duties are in addition to existing tariffs. Currently, duties of up to 40% already apply to certain solar exports.

The probe further examined whether Indian exporters benefited from government subsidy schemes tied to export performance. The DOC cited programmes such as the Advance Authorisation Program, Duty Free Import Authorisation Scheme, Duty Drawback Program, Export Promotion of Capital Goods Scheme, and RoDTEP. Because these benefits are linked to export performance, investigators considered them particularly vulnerable to countervailing duty findings.

The department also amended the period of investigation from 1 January–31 December 2024 to 1 April 2024–31 March 2025 following requests from the Government of India and Adani Group companies, aligning it with India’s fiscal year.

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In addition to subsidy concerns, the US report flagged India’s reliance on Chinese imports for key solar inputs including polysilicon, silicon wafers, silver paste, solar glass, aluminium frames and junction boxes. Investigators examined whether such inputs were supplied at below-market prices, potentially constituting transnational subsidies under US trade law.

The DOC also conducting concurrent anti-dumping investigations into solar cells from India, Indonesia and Laos. The final determination in the countervailing duty probe is scheduled for 6 July 2026. The latest levy was collectively imposed on India, Indonesia and Laos, with initial rates for Indonesia at 86-143% and 81% for Laos.

Industry reaction in India has been cautious. Some manufacturers noted that export volumes to the US have already declined in 2025. Vinay Rustagi, Chief Business Officer of Premier Energies, which is named in the probe, said exports to the US have fallen by more than 50% this year and now account for only 5–7% of total Indian production.

Ankit Jain, Vice President and Co-Group Head at ICRA Limited, told The Indian Express that the proposed duties and regulatory uncertainty are likely to dampen export volumes, which stood at around 3 gigawatts in the last calendar year. He warned that if export volumes are redirected to the domestic market, pricing pressures could intensify further and impact profitability of solar module manufacturers.

India’s solar module manufacturing capacity has expanded rapidly in recent years.

Data cited by US authorities show that Indian exports of solar cells rose sharply in recent years. Exports increased from 232 megawatts (MW) in 2022 to 2,049 MW in 2023 and 2,297 MW in 2024. Solar imports from India were valued at $792.6 million in 2024, marking a more than nine-fold rise compared to 2022 levels. Between 2021 and 2024, over 90% of India’s solar photovoltaic module exports were shipped to the US, according to India’s Ministry of Commerce.

According to industry data cited in reports, capacity exceeds 140 gigawatts as of early 2026, while annual installations are expected to be around 45–50 GWdc. The resulting supply glut has already pushed capacity utilisation levels down from about 70% to 40% at module assembly plants.

The tariff decision adds to broader trade uncertainty. The Trump administration recently introduced a 10% baseline duty on several imports after the US Supreme Court quashed earlier tariffs. The current countervailing duty action operates within ongoing trade measures targeting crystalline silicon photovoltaic cells. Experts say Indian manufacturers may need to diversify export markets to Europe and Africa while improving manufacturing competitiveness.

For now, the preliminary 126% tariff represents a significant escalation in trade tensions in the renewable energy sector. With the US being the largest export destination for Indian solar components, the final outcome of the investigation will determine the long-term impact on India’s solar export strategy and domestic manufacturing economics.

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