The 90-day pause on reciprocal trade tariffs between the U.S. and China may temporarily dampen prospects for Indian solar exporters, but the heavy U.S. import duties on Southeast Asian solar products present a significant opportunity.

The U.S. Department of Commerce, in its investigations against solar modules imported from Cambodia, Malaysia, Thailand, and Vietnam, found that the four countries sold solar cells in the U.S. at a less than fair value, and some of them originated from China.

In its concluding findings, the U.S. imposed anti-dumping and countervailing duties of up to 3,500% on imports from these countries.

Indian solar manufacturers had hoped they had a chance to step up exports to the U.S. after China was subjected to 125% tariffs. China retaliated in equal measure, but both sides climbed down from their positions to reach a deal to slash the reciprocal tariffs by 115% for 90 days.

What happens after the 90-day pause is something Indian manufacturers will be keenly watching out for. If, after three months, the U.S. increases tariffs against China, even if not to the extent of 115%, it would be to the advantage of Indian manufacturers.

That said, most solar modules exported to the U.S. currently come from Southeast Asian countries, which are facing steep tariffs. This could potentially open the door for Indian module manufacturers.

India, in contrast, was subjected to a far lesser tariff rate of 26%, which has since been brought down to 10% for 90 days.

Indian companies are already exporting solar modules and cells, with the U.S. being the prime destination. According to India’s Department of Commerce, the U.S. for 97.5% of the exports in 2024. Indian solar exports were dominated by photovoltaic modules, comprising 97.7% of total shipments, while solar cells comprised the remaining 2.3%. There is growing demand for solar cells in the U.S., but Indian manufacturers do not have enough capacity currently to export.

Mark Garvin, Co-founder and CEO of WorldOne Energies, said, “The tariffs on exports from countries like Vietnam, Malaysia, China, and Thailand—who collectively supply nearly 80% of U.S. solar modules—create a strategic vacuum. For India, this is more than a temporary trade window; it’s an invitation to become a structural supplier in the global cleantech chain.“

“Indian manufacturers with backward integration and international compliance credentials are poised to gain, particularly those already on the U.S. radar for Underwriters Laboratories (UL) and Importer-Exporter (IEC) code-certified products,” he said.

Garvin added that WorldOne Energies has started receiving inquiries from engineering, procurement, and construction contractors and utility-scale developers in the U.S. exploring non-tariff-dependent sourcing options.

Prashant Mathur, CEO of Saatvik Green Energy, another module manufacturer and exporter, concurred. “As the U.S. targets 739 GW of solar capacity by 2035 amid limited domestic production, India is well-positioned to bridge the supply gap. Export volumes are projected to reach 7–8 GW in the financial year 2025, with North America, Europe, the Middle East, and the North Africa region emerging as key destination markets. To meet this growing demand, Indian manufacturers must accelerate backward integration and continue aligning with global quality and certification standards.”

Vinay Rustagi, Director at Premier Energies, said, ““Tariffs imposed by the Trump government have opened up a potentially huge opportunity for Indian module manufacturers, with tariffs on India being significantly lower than those on China and Southeast Asian countries. If India can expedite Free Trade Agreement discussions with the U.S. using the UK template, it will be a major positive for the sector. But we need to see how the situation evolves as unpredictable changes occur. There are also tricky issues around supply chain traceability when exporting to the US.”

Vineet Mittal, Chairman, Avaada Group, said that even after the slashing of tariffs, the U.S. market remains effectively closed due to other tariffs in play.

“The suspension of the 24% tariff under Section 301 sends a signal of easing, the retention of the full 10% under Section 201, and the average 83% anti-dumping/countervailing duties mean that Chinese solar module exports to the US still face a combined tax rate of nearly 200%. “ said Mittal.

Solar module manufacturers say that industry focus has shifted to emerging markets in the Middle East, Africa, and other regions, with technological upgrades such as back contact cells and capacity relocation to Southeast Asia becoming core strategies for coping.

Solar module exporters believe the shift in the global solar market has made exports more attractive for Indian manufacturers. Exporters will earn significantly higher margins, up to 50%, compared to 20%–25% in the domestic market.

According to a solar module exporter, even distributors stand to gain higher profits from exports (25%–30% margin) than local sales (10%–12% margin).

Beyond the U.S., the industry feels that the growing economies in African countries like Nigeria and Kenya can become potential export destinations.

Harsh Jain, Director of Citizen Solar, said that U.S tariffs have been announced for only a few countries, and there are many other countries in the region with the presence of Chinese companies, like Laos, Indonesia, and the Philippines.

“Chinese dump their modules in India, but with the 44% basic customs duty (BCD) in action, and the Approved List of Models and Manufacturers (ALMM) reimposed, they are operating at a loss. The non-DCR modules that were sold at ₹17 (~$0.19)/W-₹18 (~$0.21)/W are now available for ₹13.25(~$0.15)/W-₹14 (~$0.16)/W.

Jain added that even with BCD, Chinese modules are available at prices on par with Indian non-domestic content requirement modules.

“Now, the only market remaining for Indian exporters is the U.S., where we have less competition from China, but we need to wait until their policies stabilize. In other markets like Africa and Europe, Chinese modules land at ₹10 (~$0.11)/W or even lower,” added Jain.

Quality and Pricing Challenges

While there is consensus about the opportunity that the tariff hikes on Chinese modules provide to Indian exporters, some stakeholders see that the quality of India-made modules could be challenging.

Module manufacturers feel that the real demand will come from countries that can demonstrate end-to-end traceability, long-term reliability, and a competitive pricing model after accounting for logistics expenses.

They say modules for export must be at least 15%-20% better in quality than those meant for use in India if they must find takers in overseas markets.

Garvin added that only a few module manufacturers can meet the module quality standards set by the U.S.

According to Garvin, U.S. buyers demand solar module certification like UL 61730 and IEC 61215/61730. They also require that modules resist potential-induced degradation, be traceable via blockchain, or have a digital passport feature. Such modules must perform reliably across snow-load zones and high-wind regions.

He added that while India adheres to the Bureau of Indian Standards norms and IEC standards, the U.S. adds another layer with UL listing, mandatory fire safety classifications, and third-party accelerated aging tests.

Module manufacturers highlight that while Indian tenders rarely ask for micro-crack analysis or hot-spot detection, the U.S. has been increasingly adopting digital serial traceability and lifecycle impact assessments, which are not yet mainstream in India.

However, Suhas Donthi, Group CEO of Emmvee, believes there is no significant difference in the technical rigor of testing standards.

“The U.S. primarily relies on UL standards, while India and most of Europe follow IEC standards. The main distinction lies in certifying bodies and regulatory enforcement. U.S. developers often refer to independent test results—such as those from Kiwa PVEL—to assess long-term reliability and field performance.”

Indian module manufacturers are also worried about the potential tariff relief’s applicability if they continue to use Chinese-origin cells.

“According to current U.S. customs regulations, the country of origin for solar products is determined by the origin of the solar cells, regardless of where they are assembled. Indian-assembled modules using Chinese or Southeast Asian-origin cells could still be subject to U.S. safeguard or anti-dumping duties. To mitigate this, Indian manufacturers must either localize cell production or source from compliant, non-restricted countries,” said Donthi.

Garvin said if the U.S. treats Chinese-origin cells as part of a circumvention route, Indian modules may also attract the same safeguard duties as Southeast Asian countries. Origin documentation and transparent supply chains will become critical at this stage.

“The U.S. Department of Commerce will likely scrutinize modules with Chinese cells, even if assembled in India,” said Garvin. He added that his company is pushing for stronger domestic cell manufacturing under the Production Linked Incentive Phase II to secure long-term export viability in India.

Solar Cell Shortage

The other issue is that of solar cells. India’s solar cell capacity is very limited, triggering concerns that modules made with cells imported from countries targeted by the U.S. could become an issue .

According to Mercom’s State of Solar PV Manufacturing in India 2025 report, the country’s cumulative solar module manufacturing capacity in 2024 was 90.9 GW, and solar cell capacity was 17.2 GW.

Module manufacturers opine that India must triple its domestic cell capacity to meet the growing demand.

According to Garvin, achieving the required solar cell capacity additions could take another 18 to 24 months. In the interim, manufacturers expect a short-term module supply shortage in the domestic market.

Module manufacturers also highlighted the need for exclusive manufacturing lines for domestic and export markets to prevent shortages.

Garvin said that if Indian Tier-1 manufacturers prioritize U.S. exports, utility-scale developers in India will face longer lead times and price pressures. He added that WorldOne is exploring dedicated lines for exports.

“If Indian manufacturers aim to capture just 15% of the Southeast Asia void, we’re looking at a 7 GW to 8 GW demand from the U.S. annually,” said Garvin. The demand from the U.S. constitutes almost 20% of India’s current capacity. Considering India’s ~30 GW to 35 GW annual solar target, it leaves a capacity gap of over 10 GW.

Supply Chain Challenge for Developers

Module manufacturers expect a module shortage by the second half of 2025. They also predict a 7%-10% rise in module prices if Indian module manufacturers favor exports over catering to the domestic market. The module price surge could negatively impact the viability of price-sensitive commercial, industrial, and small utility developers.

Gagan Gupta, Vice President of Procurement, Supply Chain Management, Sunsure Energy, said the current tariff on Indian exports appears positive for developers as it may lead to softer prices. The higher tariffs imposed on other countries position Indian manufacturers more competitively in the U.S. market, potentially boosting exports.

However, he added that the rise in export of Indian-made modules could also lead to an upward pressure on domestic prices.

Gupta raised concerns about the government mandating the usage of DCR modules and cells under the ALMM 2.0, given that the Indian domestic cell manufacturing capabilities remain at a nascent stage.

Mercom reported about the Ministry of Finance’s decision to impose provisional anti-dumping duties on solar glass imports from China and Vietnam, increasing module costs from ₹0.80 (~$0.0094)/W to ₹0.90 (~$0.011)/W. Besides rising costs, the module supply chain disruption has also delayed projects.

Chinese companies are rapidly setting up solar module manufacturing facilities in the Middle East, targeting exports to the U.S. These exports are expected to begin competing with Indian shipments in the near future.