New Delhi: The imposition of a 26% reciprocal tariff by the US on Indian goods is getting a mixed response from the renewable energy industry, especially solar component makers, with some seeing it as a setback while others stating it as an opportunity.
“It seems like a neutral or slightly positive event for the solar industry at least right now considering higher tariffs have been imposed on other major solar exporting countries as well,” Vikram V, Vice President & Co-Group Head – Corporate Ratings, ICRA, told ET. “This will increase solar equipment prices across.”
Some others also believe that with equal or higher tariffs on countries like Vietnam, Malaysia and Thailand, India could benefit if the differential tariffs lead to lower landed cost of the items.
“Over the next few days, we will have more sector-specific clarity,” Deepto Roy, Partner, Shardul Amarchand Mangaldas & Co told ET. “The overall impact on the energy sector could be limited.”
“It’s too early to comment on implications for solar manufacturers as we need to see the fine print. To the extent there is a net relative duty on India, it is obviously undesirable and may impact the market adversely,” said Vinay Rustagi, Director at Premier Energies, which exports solar cells to the US.
India’s export of solar equipment, which majorly comprises modules, is nearly about $1 billion with around 3.5-4 GW export in FY25 of which 95% was to the US, as per provisional data from the industry. The exports aren’t substantial considering India’s overall shipment to the US as well as the country’s domestic market consumption.
The Indian exporters and manufacturers, however, were looking at substantial growth in shipment in the next few years despite anticipated capacity additions in the US.
India’s current solar module manufacturing capacity is 74 GW and is expected to reach 100 GW by 2030, while cell manufacturing capacity is 25 GW as of March. The US’ module capacity has also crossed 50 GW, pumped by its Inflation Reduction Act, while cell capacity plan has been announced by companies for 56 GW.
“The US, while investing significantly in domestic module manufacturing, continues to face a critical shortfall in solar cell capacity. Indian manufacturers, with…cell and module lines, are well positioned to meet this gap,” the Indian Solar Manufacturers Association (ISMA) had last month said in a letter to the renewable energy ministry.
However, some feel that the domestic market consumption is sufficient to absorb all capacity in case the exports take a hit.
The uncertainty around tariffs makes the US-India bilateral trade agreement (BTA) talks important for the industry.
“US is a very important market for us and we definitely need to have a very strong BTA with them,” Amit Paithankar, Whole-time director and CEO of Waaree Energies Ltd, India’s largest exporter of solar modules, told ET.
“It seems like a neutral or slightly positive event for the solar industry at least right now considering higher tariffs have been imposed on other major solar exporting countries as well,” Vikram V, Vice President & Co-Group Head – Corporate Ratings, ICRA, told ET. “This will increase solar equipment prices across.”
Some others also believe that with equal or higher tariffs on countries like Vietnam, Malaysia and Thailand, India could benefit if the differential tariffs lead to lower landed cost of the items.
“Over the next few days, we will have more sector-specific clarity,” Deepto Roy, Partner, Shardul Amarchand Mangaldas & Co told ET. “The overall impact on the energy sector could be limited.”
“It’s too early to comment on implications for solar manufacturers as we need to see the fine print. To the extent there is a net relative duty on India, it is obviously undesirable and may impact the market adversely,” said Vinay Rustagi, Director at Premier Energies, which exports solar cells to the US.
India’s export of solar equipment, which majorly comprises modules, is nearly about $1 billion with around 3.5-4 GW export in FY25 of which 95% was to the US, as per provisional data from the industry. The exports aren’t substantial considering India’s overall shipment to the US as well as the country’s domestic market consumption.
The Indian exporters and manufacturers, however, were looking at substantial growth in shipment in the next few years despite anticipated capacity additions in the US.
India’s current solar module manufacturing capacity is 74 GW and is expected to reach 100 GW by 2030, while cell manufacturing capacity is 25 GW as of March. The US’ module capacity has also crossed 50 GW, pumped by its Inflation Reduction Act, while cell capacity plan has been announced by companies for 56 GW.
“The US, while investing significantly in domestic module manufacturing, continues to face a critical shortfall in solar cell capacity. Indian manufacturers, with…cell and module lines, are well positioned to meet this gap,” the Indian Solar Manufacturers Association (ISMA) had last month said in a letter to the renewable energy ministry.
However, some feel that the domestic market consumption is sufficient to absorb all capacity in case the exports take a hit.
The uncertainty around tariffs makes the US-India bilateral trade agreement (BTA) talks important for the industry.
“US is a very important market for us and we definitely need to have a very strong BTA with them,” Amit Paithankar, Whole-time director and CEO of Waaree Energies Ltd, India’s largest exporter of solar modules, told ET.
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