Threat of US Anti-Dumping Duties on Indian Solar Module Exports

Four Southeast Asian nations will be the prime focus of likely import duties


India’s solar exports success story could run into trouble if the U.S. entertains petitions from domestic manufacturers to impose anti-dumping (AD) and countervailing duties (CVD) on module imports.

While the four Southeast Asian countries of Malaysia, Vietnam, Thailand, and Cambodia are more likely the focus for the AD/CVD petitions from U.S. manufacturers, there is a possibility that Indian exports could also be covered, according to investment banking firm ROTH Capital Partners.

“One new regulation may allow current anti-dumping tariffs to be increased, while another may open the door to go after third government subsidies, i.e., Chinese subsidies such as “Belt and Road” that may support one of these Southeast Asian countries,” ROTH said in a report earlier this month. The petitioners could also consider bracketing India with these countries.

The import tariff moratorium is due to end in June this year. After imposing import duties on Chinese solar modules, the U.S. Department of Commerce clarified the scope of the anti-circumvention probe last August, allowing the import of solar modules made outside of Southeast Asia.

Indian solar exports have surged in the last couple of years, benefitting from restrictions on Chinese imports. According to recent Ministry of Commerce data, Indian solar exports rose 227% to $1.8 billion (~₹152.6 billion) in 2023 from $561 million (~₹46.4 billion) in 2022.

The U.S. was the top buyer of Indian solar cells and modules, accounting for 97.3% of the exports in 2023.

U.S. solar imports nearly doubled in 2023, with about 50 GW of modules making their way to the solar market. Southeast Asia accounted for 78% of the U.S. photovoltaic module imports.

If AD/CVD tariffs are applied to Indian exports, local manufacturers could feel the heat and lose their cost arbitrage if they have to factor in these tariffs.

The question, however, is whether U.S. manufacturers consider the volume of exports from India significant enough for them to seek relief under the AD/CVD regime.

Raj Prabhu, CEO of Mercom Capital, commented, “Indian manufacturers cannot take the U.S. market for granted, and companies need to have alternative strategies if such a scenario plays out. In the end, the goal is similar for India and the U.S.; both countries want to protect and build their domestic clean energy manufacturing capabilities and supply chain instead of depending on imports.”

Last month, talking about Indian solar manufacturing, Prabhu had said a policy change in the U.S. post-elections could potentially affect export opportunities for Indian manufacturers.

According to Prabhu, the crash in solar module prices and the overcapacity situation in China have led to some U.S. manufacturing projects being canceled and many getting into a wait-and-see mode. “The Biden administration wants to see the Inflation Reduction Act, a signature accomplishment, succeed at any cost. To build a clean energy manufacturing base, the U.S. administration is willing to do what it takes in terms of tariffs or other means to protect domestic manufacturers and investments. In an election year, both candidates want to show they are tougher than the other when it comes to China, trade, and tariffs.”

According to a Reuters report, the U.S. government may allow a request by South Korea’s Hanwha QCells to reverse a two-year-old trade exemption that has allowed imports of bifacial solar panels from China and other countries to avoid tariffs.

QCells is heavily invested in solar manufacturing expansion in the U.S. Last October, it added 2 GW of new capacity at its solar panel manufacturing facility in Dalton, Georgia, bringing the factory’s total output to over 5.1 GW.

The Solar Energy Manufacturers For America Coalition believes 90% of solar panel imports constitute bifacial modules.