India-US Trade Deal- Is It Good Times For Indian Solar Manufacturers?

The United States (US)-India trade deal lowers tariffs on Indian goods to 18 percent, raising hopes that Indian solar module manufacturers will see an upside from the US market, finally. Keep in mind that with heavier punitive tariffs on Chinese imports, the US market had emerged as the key, and sometimes only export destination for Indian makers, accounting for over 95% of exports until 2023.

However, much has changed since then, besides the US tariffs that were imposed, to make the recovery a lot more difficult than imagined by some. Stocks of most module manufacturers shot up today on news of the trade deal, in most cases, higher than the broader market. Established exporters like Waaree Energies were notable for the rise, going up over 10% on the news.       

Uncertainty Still Prevails 

However, multiple factors like US trade remedies, investigations, and policy uncertainty cloud the picture. While India has become the US’s top alternative supplier due to restrictions on Chinese imports, tariffs and compliance hurdles continue to constrain growth.

Waaree itself has already provisioned for a possible fine/settlement based on the duty evasion investigation launched against it. The sum of  ₹294.78 crore in its FY26 financials to cover potential liabilities from the ongoing US Customs and Border Protection (CBP) investigation into alleged duty evasion is an indicator that doing business will not revert to business as usual soon. 

Positive For Broader Export Market 

Add to that additional capacities that have come up in the US in the past year, and Indian makers will face a much more determined and larger group of local US players who will push back against imports. All in all, the trade deal is a positive for the broader Indian export basket, but for the solar sector, the Champagne might just have to stay on ice for a while.   

Prashant Mathur, CEO of Saatvik Green Energy, stated, "The U.S. decision to reduce tariffs on Indian goods from 25% to 18%, along with the elimination of the additional punitive levy, represents a strategic turning point for the solar sector, rather than just a routine policy change."

Cost-competitiveness of Indian solar products 

He noted that "India's solar exports, which include solar cells and solar modules, have already reached billions of dollars, making the United States our most important foreign market." The seven-percentage-point reduction in tariffs significantly enhances the cost-competitiveness of Indian-made solar cells and modules. This improvement will make projects more profitable for U.S. developers and create a substantial new demand for high-efficiency, Made-in-India products in the coming years.

Prashant Vasisht, Senior Vice President and Co-Group Head, Corporate Ratings, ICRA Ltd said, "The announcement of the US-India trade deal reportedly includes removing the 25% penal tariffs on India, with the latter agreeing to stop the purchase of crude oil from Russia. Additionally, India is to step up the purchase of US crude oil and potentially start buying oil from Venezuela. For the Indian refining sector, there are ample avenues, including the US, to purchase crude as Russian crude accounted for less than 2% of Indian crude imports prior to FY2023. The discounts on Russian crude oil were marginal prior to US announcing sanctions on some Russian crude suppliers in October 2025, and ICRA estimates that replacement of Russian crude with market-priced crude would lead to an increase in the import bill of the country by less than 2%. Additionally, Venezuelan crudes are heavy and sour and therefore cheaper and would be of interest to Indian refiners, many of whom can process these types of crudes."