US tariffs trigger 35% decline in India’s solar exports, which were hit hard since America was basically India’s main buyer. Climate Risk Horizons pointed this out in a recent report, and it exposes structural vulnerabilities in the country’s renewable energy trade strategy. With fewer exports going out, people now worry about how stable the solar sector will be down the road. If India wants to keep its solar manufacturing scene alive and thriving, it needs to broaden its customer base and ramp up domestic demand, fast.

Why Did US Tariffs Cause a Sharp Drop in India’s Solar Exports?

• Sudden Tariff Hike: India’s solar module export now faces a whopping 126% duty in the US market, causing a sharp decline. Earlier, a 50% blanket tariff (2025) had already triggered a steep decline in exports.
• Sharp Decline in Export: India’s export has sharply declined from $134m (Aug 2025) to $80m (Sept 2025). The decline has reduced the export volume by almost 40% month-on-month.
• Over-Dependency on a Single Market: India’s export of solar modules to the US accounted for ~95% of India’s total solar module export, whereas India accounted for merely 7% of the total US imports.
• Price Pressure: India’s solar module export has faced a 31% price hike, causing a decline in the export margins, which are as high as 40-60% in the case of the US, which is a developed market.

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How Has India’s Solar Manufacturing Growth Been Affected?

• Rapid Capacity Expansion: The solar module manufacturing capacity of India has expanded to ~144 GW by the end of 2025, making it one of the fastest-growing solar producers in the world.
• Export Growth Before Tariffs: From FY22 to FY24, exports of photovoltaic modules made in India to the US have grown almost 10-fold, which is because of the US’s need for non-Chinese solar supply chains.
• Risk of Underutilisation: The decline in exports may cause a large portion of this 144 GW to remain idle.
• Global Competition Pressure: The solar module market is dominated by China, which accounts for over 75-80% of the global solar module trade.

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What Steps Can India Take to Reduce Export Dependence?

The solar sector in India is at a crucial point in its evolution, and experts predict that India will need to find new markets (especially the EU, where the dependence on Chinese imports of solar products is still very high) to avoid risks associated with having too few purchasers for their products. Additionally, creating new trade partners in the growing economies of Africa and Southeast Asia can help India to insulate its solar exports from geopolitical events.

US tariffs trigger 35% decline in India’s solar exports, which is not just a disruption to trade but must also be viewed as a beginning for structural changes. Although India has done an excellent job of creating manufacturing capacity, its sole reliance on one export destination has revealed significant vulnerabilities. If India diversifies its market opportunities and increases the adoption of solar within its borders, it will not only stabilise the solar industry but also improve long-term energy security and economic stability.

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