America gives a blow to India by imposing 126% tax on solar energy

The Trump administration imposed an initial tariff of 126% on solar energy imports from India. The US Commerce Department also imposed initial tariffs ranging from 86% to 143% for Indonesia and 81% for Laos. 

These rates are based on an investigation into foreign government assistance. The US says this allowed exporters from these countries to undercut American solar companies.

While these tariffs are intended to benefit domestic companies, they have increased uncertainty in an industry that is disliked by US President Donald Trump. The move could increase costs for both producers and consumers.

Taxes separate from global tariffs

These tariffs would be separate from Trump's broader global tariffs, which were struck down by the US Supreme Court last week. 

In response, Trump imposed new tariffs of 10% and said they could be raised to 15%. The president also signed a trade agreement with India earlier this month, aimed at reducing trade tensions between the two countries.

Import of solar

According to a Bloomberg report, 57% of total solar module imports into the US in the first half of 2025 came from India, Indonesia, and Laos. 

Some developers began sourcing panels from Southeast Asian countries after the US imposed heavy tariffs on four Southeast Asian countries that previously accounted for a large share of imports. 

According to the Commerce Department, solar energy imports from India totaled $792.6 million in 2024, more than nine times the value of 2022.

Citi analyst Vikram Bagri wrote in a research note on Tuesday that high tariffs could virtually close the US market to Indian solar panel companies. 

An American solar group, the Alliance for American Solar Manufacturing and Trade, has requested an investigation by the Commerce Department into government aid, arguing that this investigation is necessary to protect American manufacturing.

Donald Trump
United States of America