Manufacturers turn to alternative sourcing hubs to preserve US market access amid new trade barriers


Indian solar manufacturers are reconfiguring their global supply chains to retain access to the United States market and cushion the impact of steep import tariffs, senior industry executives told Reuters.

The development follows the imposition of tariffs of up to 50 per cent on most Indian exports by the United States, among the highest levied on any of its trading partners. The duties, which came into force on 27 August, have prompted Indian firms to explore sourcing strategies that minimise exposure to the new cost structure.

Vikram Solar, which holds roughly 15 per cent of its order book in the US market, said it was procuring solar cells from countries facing lower tariffs. The company is exploring alternative supply chains from nations with significant cell capacities and relatively lesser levies than India.

Under US trade rules, the tariff on solar modules is determined by the country where the photovoltaic cell’s PN junction and its electricity-generating component is manufactured. This means that even if a module is assembled in India, the applicable duty depends on the origin of the cell used inside.

While Vikram Solar did not disclose whether the duties had affected its September-quarter performance, the company expressed confidence in meeting its US commitments despite the trade headwinds.

Waaree Energies, India’s largest solar module producer and one of the country’s leading exporters to the US, said it was avoiding the use of domestically manufactured cells for exports to circumvent higher duties. The company is also under investigation by US authorities for allegedly mislabelling Chinese-made components as Indian, an allegation it has denied.

Waaree has stated that its supply chain for the US market is completely China-free and configured to ensure the lowest possible tariff impact. The company added that its order flow to the US had not yet been disrupted by either the new tariff regime or the ongoing investigation.

(with input from Reuters)