US President Donald Trump has imposed preliminary duties of 126% on solar imports from India, a move that threatens to derail the India-US trade deal.
The US Commerce Department announced the levies after a determination that New Delhi unfairly subsidised its domestic manufacturing, allowing exporters to undercut American-made products. Beyond India, the department set initial rates ranging from 86% to 143% for Indonesia and 81% for Laos.
The decision comes barely weeks after New Delhi and Washington agreed on a framework for the India-US trade deal to bring down tariff on India’s exports to 18% from 50% earlier. That was before the US Supreme Court quashed Trump tariffs, calling them unconstitutional. Trump then pivoted to a new 10% baseline duty on most imports, with threats to hike that to 15%.
Now, this latest protectionist pivot suggests that the “America First” policy remains the priority, even at the expense of strategic trade deals.
Meanwhile, Indian and American officials have postponed a three-day meeting scheduled for this week to discuss the interim trade deal.
The Solar Supply Chain
The surge in imports from India, Indonesia, and Laos—which accounted for 57% of US solar module imports in the first half of 2025—is largely seen as a bypass for Chinese firms. Facing stiff US barriers, Chinese manufacturers have shifted production across Southeast Asia to maintain market access.
India has been a primary beneficiary of this shift. Solar imports from the country reached $792.6 million in 2024, a nine-fold increase from 2022 levels.
Tim Brightbill, lead attorney for the Alliance for American Solar Manufacturing and Trade, hailed the move as a victory for domestic investment. “Those cannot succeed if unfairly traded imports are allowed to distort the market,” he said.
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Headwinds for US solar
But for US solar firms, the duty represents a significant headwind. By effectively locking out Indian supply, the administration risks driving up project costs at a time when the industry is already grappling with high interest rates and policy uncertainty.
A final determination on the subsidies is expected by 6 July 2026, alongside a concurrent anti-dumping investigation.