India’s solar panel exports are under threat as the U.S. imposes 50% tariffs on shipments from India. The U.S. is India’s biggest export market for solar modules, accounting for 90% of shipments. Industry experts warn that upcoming anti-dumping duties could make selling in the U.S. even harder. This will add pressure to Indian manufacturers already struggling with oversupply. Many are concerned that India will face severe overcapacity by 2026.
Domestic demand is also slowing. The Indian government has reduced project awards and tenders in recent months. Officials are urging companies to bid cautiously, based on slower electricity demand growth. Analysts say the combination of weak local demand and shrinking exports will worsen the supply glut. Some factories are now operating at only 25% capacity. Others, like Premier Energies, report slightly better usage but still below potential.
India doubled its module production capacity to 74 gigawatts by March. It plans to reach 190 GW by 2027, backed by import duties and local manufacturing rules. However, these policies have raised production costs. Solar panels made with Indian cells are up to 143% more expensive than Chinese-made ones. This price gap makes it hard for Indian companies to compete globally.
Many Indian firms use cheaper Chinese cells, which have dropped in price by over 80% since 2022. This allowed firms like Adani and Waaree to boost exports, mainly to the U.S. But new U.S. rules may stop this trend. India’s plan to mandate domestic cell use from June 2026 will add more cost pressure. Experts fear this could lead to panic imports, price hikes, and supply chain disruptions.
In response, Indian manufacturers may be forced to look for new markets or rely on weak domestic demand. But finding new buyers won’t be easy, especially at current prices. The rising costs are already being passed on to electricity distributors. Analysts warn that unless India adjusts its strategy, its solar industry may face serious long-term challenges.