The imposition of tariffs by the United States, particularly under the Trump administration, has cast a shadow over India's burgeoning solar industry. While India has made significant strides in expanding its solar capacity and manufacturing capabilities, these tariffs pose a threat to the competitiveness of Indian solar products in the crucial US market.

In early August 2025, President Trump announced a 25% tariff on all imports from India. This was followed by an additional 25% tariff. According to Trump, these tariffs were necessary because India's tariffs are "far too high". The Indian government estimates that these tariffs could impact $48.2 billion worth of exports.

The US is the largest export market for India, accounting for nearly 18% of its total exports, amounting to $77.5 billion. In fiscal year 2024, India exported $2 billion worth of solar photovoltaic (PV) modules to the US. The imposition of tariffs could significantly impact the industry. The export market for Indian solar manufacturers could shrink dramatically due to price disadvantages. For example, Indian manufacturers are selling TOPCon solar modules to the US at around $0.30 per watt-peak (Wp), compared to $0.17-0.19 per Wp domestically. Tariffs would further inflate these prices in the US market, worsening the disadvantage.

However, the Secretary of the Ministry of New and Renewable Energy (MNRE), Santosh Kumar Sarangi, stated that the tariffs would not have a significant impact on India's renewable energy exports because the export volume is low.

Despite the MNRE's optimistic outlook, the tariffs could erode the competitiveness of Indian manufacturers. For instance, in the first quarter of calendar year 2024, Indian solar module exports accounted for 4.7% of US solar imports, compared to 87% from Southeast Asian countries, where many factories are Chinese-owned. While US anti-dumping duties on these imports (up to 271%) create an opportunity for Indian manufacturers, new tariffs could erode their competitiveness. Key Indian players like Waaree Energies and Vikram Solar, which exported over 50% of their production to the US in FY24, could see revenues plunge.

To mitigate these risks, the Indian solar manufacturing industry must prepare. One strategy is to focus on components less likely to be targeted by tariffs, such as silver paste, junction boxes, solar glass, cables, solar net-meters, ethylene vinyl acetate, backsheets, and aluminum frames. According to the Council on Energy, Environment and Water (CEEW), India may already have a competitive edge in such components.

Despite these challenges, India's solar sector has been experiencing impressive growth. In the first half of 2025, India installed 14.3 GW of new utility-scale solar capacity, marking a 49% increase year-on-year. India's solar module manufacturing capacity has reached about 100 GW, enough to meet annual domestic demand. The country has also crossed 100GW of cumulative solar capacity, becoming the world's fourth-largest PV market. According to JMK's latest report, India RE Update Q2 2025, rooftop solar additions surged 76% year-on-year to reach 3.2GW during the same period. For the full calendar year, India is projected to add 39GW of solar capacity. India has also surpassed Japan to become the world's third-largest solar power producer.

The Indian government is committed to achieving 500 GW of clean energy by 2030 and net-zero emissions by 2070. Projects like large solar parks, rooftop solar, and the PM Surya Ghar Muft Bijli Yojana are helping households become self-reliant in energy. Renewables now make up 50.07% of India's total installed power capacity.

In conclusion, while Trump's tariffs pose challenges to India's solar exports to the US, the Indian solar industry remains robust, driven by strong domestic demand and ambitious renewable energy targets. The industry is adapting by focusing on less tariff-sensitive components and expanding domestic manufacturing capacity.