Trump slaps 126% tariffs on India solar imports in threat to India-US trade deal
Trump slaps 126% tariffs on India solar imports in threat to India-US trade deal
M.U.H
25/02/202646
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.
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.
