The United States has triggered fresh trade tensions by imposing very high tariffs on solar panel imports from India and other Asian countries. This move comes amid ongoing disputes over subsidies and concerns about unfair competition — and it threatens key elements of an India-US trade deal.
Tariff Details and Scope
On February 24, 2026, the U.S. Department of Commerce announced preliminary countervailing duties (CVDs) on solar cells and modules imported from India, Indonesia, and Laos. India faces a tariff of about 125.9–126%, while Indonesia and Laos also see tariffs in excess of 80–100%, depending on product lines.
These duties are part of a broader investigation into alleged government subsidies that Washington says allow foreign manufacturers to undercut U.S. solar producers — including companies like First Solar and Hanwha Qcells.
Importers of affected solar products must now post substantial cash deposits at U.S. customs while the investigation continues. A final determination is expected by July 6, 2026.
Why Are Tariffs Being Imposed?
The core U.S. argument is that governments in exporting countries provide financial support or incentives to solar manufacturers, skewing competition and harming U.S. industrial interests. By imposing high tariffs, the U.S. aims to protect domestic solar manufacturing and restore competitive balance.
Critics of the policy argue that such steep duties could disrupt global renewable energy supply chains, raise project costs, and slow solar expansion.
Impact on India-US Trade Relations
The tariff action has cast a shadow over an ongoing attempt to negotiate a broader India-US trade deal. Earlier agreements planned to lower tariffs on a wide range of goods between the two countries, including a reciprocal tariff reduction to 18% on some products.
But with the sudden imposition of heavy solar duties, both governments are now navigating increased uncertainty — and some planned trade meetings have been postponed or recalibrated.
Reactions From Industry
Indian solar exporters and industry bodies have expressed concern over the move, calling it a setback for manufacturers that have relied on the U.S. market. Meanwhile, some Indian companies say they may challenge the tariffs through legal channels rather than purely diplomatic ones.
Stock markets reacted sharply, with shares of major Indian solar manufacturers dropping as investors digested the tariff news.
