High US tariffs and possible anti-dumping duties on Indian solar panel exports are set to deepen a supply glut in India next year as domestic project bidding slows, industry officials and analysts said.
US President Donald Trump’s 50% tariffs on Indian shipments will restrict sales to its largest overseas market, which accounts for 90% of exports.
The situation could worsen if the US Commerce Department imposes anti-dumping duties following a 17 July petition from American solar companies targeting imports from India, Indonesia and Laos.
“The 50% tariff will squeeze margins, and potential anti-dumping duties will make competing in the US even tougher,” said Raj Prabhu, CEO of consultancy Mercom Capital.
India’s awards of new solar projects slowed sharply in the June quarter. “We expect that India will enter overcapacity stage already in 2026, which will feel even worse with the loss of the US market,” said Wood Mackenzie analyst Yana Hryshko.
Government incentives have doubled annual module capacity to 74 gigawatts by March, with forecasts of 190 GW by 2027. Yet factories are running at only 25% utilisation on average, said Vinay Rustagi of Premier Energies.
“Some companies are running at 80%-85% like us, others are running at much lower capacity,” he added.
Finding new export markets will be difficult. Indian modules using Chinese cells are 48% more expensive than Chinese modules, while those made with Indian cells are 143% costlier, Mercom data shows.
India plans to mandate domestic cell use from June 2026, though these are more than three times the cost of Chinese alternatives, said Rystad Energy analyst Fei Chen.
Analysts expect a short-term surge in Chinese imports before the rules take effect.
“Reliance on cell imports is likely to increase in the short term, potentially leading to stockpiling, price spikes, and supply chain pressures,” Prabhu said.
India has seen a solar success in recent months, with the country announcing in July that 50% of its installed capacity now comes from renewable sources – five years ahead of target.
