United States President Donald Trump announced plans to impose 126 per cent tariffs on solar imports from India, which could threaten the India-US trade deal. This move suggests that America’s priority is its policy, even at the expense of the India-US trade agreement.
The US Commerce Department announced the levied tariff after determining that New Delhi unjustly subsidises its manufacturing, allowing exporters to undercut American-made products. Apart from India, the department has set an initial tariff ranging from 86% to 143% for Indonesia and 81% for Laos.
The decision came after the US and India were close to finalising the framework of the trade deal that would lower tariffs on India’s exports to 18% from 50% earlier. However, it was before the US Supreme Court ruled Trump’s tariffs unconstitutional. Trump then pivoted to introduce a new 10% baseline duty on most imports, with a warning that it could increase to 15%.
The massive increase in exports from India, Indonesia, and Laos, which accounted for 57% of US solar module imports in the first half of 2025, is seen as a way to bypass Chinese companies. China’s manufacturers have shifted production across Southeast Asia to maintain market access due to stiff US barriers.
India has been a primary beneficiary of this shift. Solar imports from the country reached $792.6 million in 2024, a ninefold increase from 2022 levels.
Tim Brightbill, lead attorney for the Alliance for American Solar Manufacturing and Trade, praised the move as a win for domestic investment. “Those cannot succeed if unfairly traded imports are allowed to distort the market,” he said.
