The United States plans to impose anti-dumping duties on solar power equipment from four Southeast nations. Countries including Cambodia, Thailand, Malaysia and Vietnam, could face as much as 3521 per cent duty on their solar equipment exports to the US. Can India be a beneficiary of this?
Following the announcement, the share of major Indian solar equipment manufacturers like Premier Energies and Waaree Energies went up as much as 6 per cent on Tuesday.
How will US duties on rest of Asia impact India?
The latest duties on the four biggest solar exporters to the US will likely benefit the Indian solar companies who already have a good presence and supply chain network in the US. Currently, India’s solar equipment exports to the US are subject to a 36 per cent tariff, which makes it the lowest among the top solar exporters in the US.
In the past couple of years, India’s major PV module manufacturers, like Adani Solar, Waaree Energies, Premier Energies, and Vikram Solar, have been focusing on exports. The slowed demand from the Indian market and higher margins in the US and EU are the primary reasons for the increased exports. The report by the Institute for Energy Economics and Financial Analysis (IEEFA) states that even after the logistical expenses, Indian companies get about 40 to 60 per cent higher profit margins in the US market than in the Indian market.
Adani Solar, Waaree Energies and Vikram Solar, the three major Indian solar equipment exporters, exported over half of their production in FY24 to the United States. Following the market trend, other smaller Indian companies like Navitas, Solex Energy and ReNew Power are also establishing their supply chain network in the US and Europe.
Waaree Energies, whose 20 per cent revenue in the FY 25 came from the US, has set up a 1.6 GW PV module manufacturing facility in Texas. Vikaram Solar has also planned to invest $1.5 billion to set up PV manufacturing facility and assembly plant in Colorado.
Massive surge in India’s solar exports
In the past two years, India’s solar equipment exports have seen a massive surge. According to a report by the Institute for Energy Economics and Financial Analysis, India’s photovoltaic (PV) module exports grew 23 times between FY22 and FY24. The United States accounted for about 97 per cent of these PV module exports, which are worth about $2 billion.
In 2024, the four Southeast Asian countries accounted for over 75 per cent of the United States’ solar equipment imports. The US imported about $12 billion worth of solar equipment from the four Southeast countries in 2023.
China, which used to be the biggest solar equipment exporter to the USA till 2011, had over 50 per cent share in the US’ total solar equipment imports. However, the Obama administration levied 36 tariffs in 2012, which were followed by 25 per cent additional tariffs in 2018 by Trump administration. This resulted in the fall of China’s share in the US’ solar imports to a mere by 2021.
Advantage India
The current geopolitical situation is giving Indian solar equipment manufacturing companies an edge in the global market. If the Indian companies could manage to continue the leverage for some time, they have an opportunity to target the larger markets in Europe and Asia well.
China has over 80 per cent share in the global solar energy market. The 10 biggest solar equipment manufacturers in the world are based in China. Additionally, China’s solar equipment manufacturing cost is much lower than other countries, about 23 percent less than India.
However, the current geopolitical situation provides Indian companies an opportunity and time to scale in capacity and technology adoption to compete with the Chinese companies in both pricing and technology.