US import duties on Indian solar panels may hit domestic OEMs, Pg13

Key Highlights:

• The US imposed preliminary countervailing duties (CVD) of 12.6% on solar imports from India.
• India's solar module manufacturing capacity exceeds 140 GW per annum and is expected to reach 165 GW by March 2027.
• In 2024, solar imports from India to the US were valued at $792.6 million, a nine-fold increase from 2022.
• Between 2021 and 2024, over 90% of India's solar photovoltaic module exports were shipped to the US.

Detailed Insights:

• Restricted access to the US market could intensify pricing pressures within India's domestic solar market due to oversupply.
• Proposed duties and regulatory uncertainty in the US are likely to dampen export volumes from India, which stood at around 3 GW in the last calendar year.
• Slowdown in project award activity and delays in signing power purchase agreements (PPA), along with transmission connectivity constraints, pose near-term challenges in solar project implementation in India.
• India needs to scale up domestic deployment to accelerate energy transition and cultivate alternative export markets, while shifting its US strategy from exporting products to exporting capital for localized manufacturing units.
• Some industry players believe the duties will have limited impact, as they have already reduced exports to the US, with exports to the US declining by more than 50% in 2025.
• Annual solar capacity installations in India are expected to be around 45-50 gigawatt direct current (GWdc), creating a substantial supply-demand gap.

Key Concepts Involved:

• Countervailing Duty (CVD): A duty imposed on imported goods to offset subsidies provided to producers in the exporting country.
• Power Purchase Agreement (PPA): A contract between two parties, where one sells electricity to the other.
• Solar Photovoltaic Module: A packaged interconnected assembly of solar cells, also known as solar panel.