US tariff war on China: Short-term benefits, market disruptions likely for Indian solar PV exporters

India, which accounts for more than one-tenth of the US’ solar PV panel imports, stands to gain from the latter’s tariff war with China and South-East Asian countries, albeit in the short term.

However, the US threat of reciprocal tariffs and the Chinese price competition could lead to market disruptions that can adversely impact solar exports from India, risk management services provider Rubix Data Sciences said in a report.

“Today, the US accounts for over 90 per cent of India’s PV cell and module exports, yet India represents only 11 per cent of total US panel imports (as of Q2 2024), indicating tremendous potential,” it added.

However, India remains dependent on China for over 50 per cent of its PV cell and module components, particularly polysilicon and wafers. If China redirects its excess supply to India at lower prices to compensate for US losses, domestic manufacturers may struggle with margin pressures and price competition.

Additionally, the US has hinted at imposing reciprocal tariffs on Indian goods from April, which could impact Indian solar exports. If tariffs increase, the cost competitiveness of Indian solar modules in the US may be affected, challenging the industry’s rapid export growth, Rubix warned.

“While Indian exporters may benefit in the short term from China’s reduced access to the US market, they must prepare for potential disruptions, both from Chinese price competition and possible US tariffs on Indian goods,” it added.

Export growth

India’s solar module exports stood at $1.97 billion in FY24, recording 91 per cent growth compared to FY23 (and a 23-fold increase from FY22). The US accounts for over 90 per cent of the solar cells and modules exports from India in FY24, Rubix pointed out.

Until 2018, the US did not import solar panels from India. However, Indian module manufacturers seized the opportunity when US legislation implemented the Uyghur Forced Labor Prevention Act (UFLPA), which adversely impacted Chinese solar manufacturers.

Indian manufacturers are currently exporting TOPCon solar modules (made with imported cells) to the US at around $0.30 per watt-peak (Wp), significantly higher than the domestic price of $0.17–0.19 per Wp, Rubix Data Sciences said

Until FY24, three of the largest domestic players — Waaree Energies, Adani Solar and Vikram Solar — were responsible for most of India’s PV exports, with each exporting over half of its annual production in FY24, it added

Other PV manufacturers, such as Grew Energy, Navitas, Solex Energy and Saatvik Energy, are also expanding into international markets and establishing supply chains overseas.

Besides, Waaree Energies and Vikram Solar are planning to set up PV manufacturing facilities in the US to capitalise on the incentives provided by the Inflation Reduction Act (IRA) 2024.

The recent US tariff hikes on Chinese solar polysilicon, wafers, and cells — now totalling 60 per cent — presents both opportunities and risks.

The impact on solar panel exports remains unclear, leaving Indian exporters in a state of uncertainty. For now, the situation is a waiting game as the full effects on the solar industry are yet to unfold, Rubix said.

Navigating the crisis

To navigate this evolving trade environment, Rubix Data Sciences suggested that Indian manufacturers will need to diversify their markets, enhance domestic production capabilities, improve product quality and reduce defects.

“India, Laos, and the US have some of the highest solar module defect rates, exceeding 8 per cent, largely due to the rapid expansion of manufacturing capacity, which has led to challenges in quality control, operational stability, and workforce training, as highlighted in Kiwa PI Berlin’s 2025 PV Module Manufacturing Quality Report.

Over 22 per cent of the observed defects in module production were directly related to cells. The implementation of the ALMM for solar cells in 2026 is expected to address these quality concerns by promoting stricter quality control, optimised manufacturing processes, and a better-trained workforce, ultimately reducing defects and ensuring long-term reliability in India’s solar module production, it added.

In contrast, countries with established manufacturing ecosystems such as Thailand, Cambodia, and China benefit from operational maturity and efficiency.