Indian Solar Manufacturers Adapt Supply Chains to Navigate US Tariff Challenges

Trump's tariffs on Indian exports became effective on August 27, imposing duties of up to 50% on most products from India, representing some of the highest rates applied to any US trading partner.

Indian solar manufacturers are strategically restructuring their supply chains to maintain their foothold in the valuable US market while mitigating the impact of these hefty tariffs, according to industry executives.

Vikram Solar, which has 15% of its current order book connected to US customers, revealed during a post-earnings analyst call on Friday that it is adapting to the tariff structure by procuring solar cells from countries subject to lower duty rates.

The US tariff system for solar modules is specifically determined by the origin country of the solar cell's manufacture, particularly where the cell's PN junction (the electricity-generating component) was produced. This means that even if module assembly occurs in India, US authorities will apply tariffs based on where the internal cell originated.

"We are investigating alternative supply chains from nations with substantial cell manufacturing capabilities that face lower tariff rates compared to India," stated Rinal Shah, a senior executive at Vikram Solar.

While the company did not specifically address whether the tariffs had affected its September quarter financial performance, it expressed optimism about fulfilling its US commitments despite the challenging tariff environment.

Waaree Energies, India's leading solar module manufacturer and a major US exporter, disclosed that it has avoided using domestically produced solar cells for its US-bound products, as these would trigger higher tariff rates.

The company is currently subject to a US investigation alleging it circumvented tariffs on Chinese-manufactured cells and panels by falsely labeling them as Indian-made products. Waaree has strongly denied these accusations.

During an analyst call on Friday, Waaree CEO Amit Paithankar emphasized that their US-destined supply chain is entirely free from Chinese components, and affirmed the company's strict compliance with all applicable regulations and laws.

"We have configured our operations specifically to minimize the tariff implications associated with our exports," Paithankar explained.

Waaree further noted that neither the newly implemented tariffs nor the ongoing US trade investigation has yet impacted their order volumes.