The United States and India recently reached a strategic turning point in trade relations. On February 3, 2026, the nations struck a deal to reduce reciprocal tariffs on Indian goods, including solar modules and energy storage components, from 25% to 18%.
For developers, relief comes from the removal of penalties. The U.S. agreed to rescind a 25% penalty tariff previously imposed due to India’s trade with Russia.
Combined with the reduction in the base reciprocal tariff, the total tariff burden on Indian solar exports is expected to fall from roughly 50% to 18%.
The White House confirmed the deal is predicated on India’s commitment to purchase $500 billion in American energy and technology over five years, while pivoting energy imports away from Russia toward U.S. and Venezuelan sources.
According to JMK Research and Mercom Capital, India exported 10.4 GW of solar modules to the U.S. in the first nine months of 2025. Roughly 97% of India’s total solar module exports were shipped to the U.S. last year.
India’s share of the total U.S. solar import market rose to roughly 11% in 2024–2025, up from about 3% in 2022, reported PL Capital.
Supply chain diversification
As the solar industry navigates a tightened trade environment, India has emerged as an alternative to Chinese-linked supply chains. Manufacturers including Vikram Solar and Waaree Energies are poised to gain market share in the utility-scale and C&I sectors.
Gyanesh Chaudhary, managing director of Vikram Solar, stated the reduction provides the “demand visibility” needed for capacity planning.
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