US penalises Indian solar exports with 126% levy as Adani firms decline probe

The newly declared 126 per cent tariff on Indian solar products by the US Department of Commerce has been attributed to the declension of Mundra Solar Energy and Mundra Solar PV, two subsidiaries of the Adani Group, which were subjected to a United States countervailing duty probe on allegations that they had availed themselves of export-contingent government incentive schemes during a brief and concentrated period of shipments.

A preliminary anti-subsidy investigation report, as reported by The Indian Express, records that the two entities were designated as ‘mandatory respondents’ in the countervailing duty proceedings, and that their withdrawal in November 2025 precipitated the invocation of the ‘Adverse Facts Available’ doctrine, the most exacting and punitive methodology deployed by the Department when a party is deemed non-cooperative, according to The Indian Express.

By operation of this doctrine, steep preliminary duties—calculated at 125.9 per cent—have now been imposed across the sector, thereby ensnaring even exporters not individually examined.

The Department concluded that Mundra Solar Energy and Mundra Solar PV had withheld material information, defaulted on prescribed deadlines, and significantly impeded the investigation by failing to furnish complete responses to the Initial Questionnaire.

It further observed that the companies had shipped solar cells in ‘massive’ quantities within a relatively brief timeframe, while simultaneously availing themselves of schemes such as the Advance Authorisation Programme, the Duty Free Import Authorisation Scheme, the Duty Drawback Programme, RoDTEP, and the Export Promotion Capital Goods Scheme, all of which were adjudged vulnerable because of their export contingency.

The investigation was instituted on August 6 last year following a petition by the Alliance for American Solar Manufacturing and Trade, a coalition representing American solar manufacturers, and the period of investigation was subsequently realigned—from the calendar year 2024 to April 1, 2024 through March 31, 2025—after representations by the Government of India and the Adani companies, so as to synchronise with India’s fiscal year.

In its determination, the Department also adverted to India’s pronounced reliance on Chinese inputs, contending that the domestic solar industry remains heavily dependent on imports from China and that transnational subsidies—wherein critical inputs such as polysilicon, wafers, and solar glass are supplied across borders at below-market prices—may distort competition.

Solar imports from India were valued at $792.6 million in 2024, reflecting a nine-fold surge since 2022, while more than 90 per cent of India’s photovoltaic module exports between 2021 and 2024 were destined for the United States.

Industry analysts have cautioned that the proposed duties, coupled with regulatory uncertainty, may constrict export volumes and intensify pricing pressures within the domestic market, thereby compressing margins for manufacturers already navigating a volatile global supply chain.

The US Department of Commerce alleged that the companies:

• Availed themselves of programmes such as Advance Authorisation, Duty Free Import Authorisation, Duty Drawback, RoDTEP, and the Export Promotion Capital Goods Scheme.

• Potentially received export-contingent benefits that could constitute unfair government subsidies under US countervailing duty law.

• Shipped solar cells in “massive” quantities during a relatively short period.

• May have benefited from transnational subsidies, including inputs supplied at below-market prices.