Trump gives fresh setback to India, US proposes up to 126 percent tariff on solar imports

New York (The Uttam Hindu): The United States has proposed an initial tariff of up to 126 percent on solar panels imported from India, a move that could significantly impact Indian exporters. The US Department of Commerce has alleged that the Indian government provided unfair subsidies to domestic manufacturers, allowing them to sell products at lower prices and harm American companies.

Under the same proposal, tariffs ranging from 86 to 143 percent have been suggested on imports from Indonesia, and up to 81 percent on products from Laos. According to a report by Bloomberg, this decision may make it difficult for Indian solar companies to compete in the US market. In 2024, India exported solar products worth 792.6 million US dollars to the United States, nearly nine times higher than in 2022.

Experts believe that the impact of the proposed duties will not be limited to exporters alone. Companies developing solar projects in the United States and consumers may also face higher costs.

The proposed tariffs are separate from the general duties recently announced by US President Donald Trump. Some broader tariffs imposed earlier had been struck down by the Supreme Court of the United States, after which the administration implemented a new 10 percent duty.

A group of American solar manufacturers had sought an investigation into alleged dumping and subsidies, arguing that protective measures were necessary to safeguard the domestic industry. A final decision in this matter is expected by July 6.

Notably, during the first half of 2025, about 57 percent of solar modules imported into the United States came from India, Indonesia and Laos. Therefore, high tariffs could also have a broader impact on the American solar energy sector.

Amid these developments, Union Commerce Minister Piyush Goyal stated on Tuesday that India would resume trade talks once there is greater clarity on the tariff situation in the United States. He said discussions would move forward as soon as the position becomes clear.

Goyal also mentioned that the terms of reference for a proposed Free Trade Agreement between India and Canada are expected to be finalized by the end of this week. Canadian Prime Minister Mark Carney is scheduled to visit India on February 26.

It is noteworthy that India and the United States had postponed a meeting of their chief negotiators in Washington on February 22, where an interim trade agreement draft was to be finalized.