The Visakhapatnam Port in India
Image: eclicks_by_bunny, Wikimedia Commons, CC BY-SA 4.0
The United States and India recently reached a strategic turning point in trade relations. On February 3, 2026, the countries signed an agreement to reduce mutual tariffs on Indian goods, including solar panels and energy storage components, from 25% to 18%.
For developers, relief comes from eliminating fines. The US agreed to withdraw a 25% penalty tariff previously imposed over India’s trade with Russia.
Combined with the reduction in the reciprocal base tariff, the overall tariff burden on India’s solar exports is expected to fall from around 50% to 18%.
The White House confirmed that the deal is based on India’s commitment to buy $500 billion of US energy and technology over five years, while shifting Russia’s energy imports to US and Venezuelan sources.
According to JMK Research and Mercom Capital, India exported 10.4 GW of solar panels to the US in the first nine months of 2025. Last year, about 97% of India’s total solar panel exports were shipped to the US.
India’s share of the total US solar import market rose from around 3% in 2022 to around 11% in 2024-2025, PL Capital reports.
Supply chain diversification
As the solar industry navigates tightened trading environmentIndia has emerged as an alternative to China-linked supply chains. Manufacturers including Vikram Solar and Waaree Energies are poised to gain market share in the utility and C&I sectors.
Gyanesh Chaudhary, managing director of Vikram Solar, said the reduction provides the “demand visibility” needed for capacity planning.
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