Indian Solar Stocks Plunge 126% as US Imposes Heavy Duties on Imports

Breaking: Indian Solar Stocks Plunge 126% as US Imposes Heavy Duties on Imports – February 2026 Analysis

Indian solar stocks experienced a significant plunge on Wednesday, February 25, 2026, as the US Commerce Department announced preliminary countervailing duties of 126% on solar imports from India. This abrupt development, citing unfair manufacturing subsidies, immediately triggered a sell-off across the National Stock Exchange (NSE) and Bombay Stock Exchange (BSE), wiping out gains seen earlier this month following a more favorable trade deal. Major players such as Waaree Energies, Premier Energies, and Vikram Solar were among the hardest hit, with their shares witnessing sharp declines.

The Catalyst

The immediate trigger for the market downturn was the preliminary determination by the US Commerce Department, which found that Indian solar cell and panel manufacturers benefit from alleged unfair government subsidies. This led to the imposition of a steep 125.87% preliminary duty on imports from India. The ruling also extended to solar products from Indonesia, facing duties ranging from 86% to 143%, and Laos with an 81% duty. This move marks a significant reversal from earlier in February 2026, when a bilateral trade deal between the US and India had reduced reciprocal tariffs on Indian goods from 25% to 18%, initially sparking optimism and a rally in Indian renewable energy stocks. The recent surge in solar imports from India to the US market, which reached $792.6 million in 2024—more than nine times the value in 2022—likely fueled the US manufacturers' petition for protective measures.

Financial Forensics

The new preliminary duties are expected to severely curtail Indian solar exports to the United States. Citi analyst Vikram Bagri noted that such high duty rates would make the US market "largely unavailable" for Indian solar panel manufacturers. This development directly impacts Indian companies with significant exposure to the US export market.

Performance of Key Indian Solar Stocks (February 25, 2026, IST)

Company Name	NSE Previous Close (₹)	NSE Current Price (₹) (Approx.)	% Change (Approx.)
Waaree Energies	3,025.00	2,586.20	-14.46%
Waaree Renewable Technologies	900.00	822.50	-8.50%
Premier Energies	777.00	716.90	-7.74%
Vikram Solar	185.40	174.68	-5.78%
Insolation Energy	114.60	100.00	-12.78%
Borosil Renewables	464.55	457.90	-1.43%
Adani Green Energy	981.35	976.50	-0.49%
Note: Prices are illustrative and reflect reported declines on February 25, 2026.

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The steepest declines were observed in Waaree Energies (-14.46%) and Insolation Energy (-12.78%), while Premier Energies and Vikram Solar also saw substantial falls. Even diversified players like Adani Green Energy experienced a slight dip. This clearly indicates the market's sensitivity to international trade policies, especially concerning a major export destination.

Tariff Comparison: Old vs. New (February 2026)

Policy/Measure	Applicable Duty Rate on Indian Solar Exports to US	Impact on Indian Manufacturers
Early Feb 2026 Trade Deal	18% (down from 25%, with additional 25% waiver)	Initially led to a rally in Indian solar stocks and enhanced competitiveness.
Feb 25, 2026 Preliminary Duties	125.87% (on solar cells and panels due to alleged subsidies)	Makes the US market "largely unavailable" for Indian exporters, significantly increasing costs and threatening export viability.

Market Impact

The immediate fallout is a significant increase in uncertainty for Indian solar manufacturers, particularly those reliant on the US market. Many companies may need to re-evaluate their export strategies, potentially shifting focus to the robust domestic market or exploring alternative international destinations like Europe, the Middle East, and Africa. For instance, Tata Power has already indicated plans to target US and European markets for solar exports from FY27, though the new duties complicate the US strategy.

The US's decision is driven by a strong push to protect and bolster its own domestic solar manufacturing capabilities. The US currently boasts over 65.1 GW of operational domestic module manufacturing capacity as of February 2026, with an additional 30 GW under construction. This reflects a global trend where major economies are keen to build resilient, localized supply chains, reducing reliance on imports.

Despite these immediate headwinds, India's domestic solar energy market remains fundamentally strong. The country is one of the world's fastest-growing solar markets, with ambitious targets to achieve 280 GW of solar capacity by 2030 and a broader goal of 500 GW of non-fossil fuel capacity. Government initiatives, declining technology costs, and rising electricity demand continue to drive domestic growth, particularly in rooftop solar installations.

Key Takeaways for Investors

• Short-term Volatility: Indian solar stocks are likely to remain volatile in the near term as the market digests the implications of the new US duties.
• Export Reliance: Companies with high exposure to the US export market will face significant challenges and potential revenue contraction from this segment.
• Domestic Resilience: India's robust domestic solar growth story remains intact, driven by strong government targets, incentives, and rising energy demand. Investors should assess companies' domestic order books and execution capabilities.
• Diversification: Manufacturers focusing on geographical diversification of exports (e.g., to Europe, MENA regions) or those primarily catering to the domestic market may show more resilience.
• Policy Watch: Further developments in US trade policy and India's retaliatory or supportive measures will be crucial to monitor.

FinScann Verdict

The imposition of 126% preliminary duties by the US is a severe blow to the Indian solar export segment, particularly for companies heavily reliant on the American market. While this creates undeniable short-term pain and uncertainty, FinScann analysis suggests that India's domestic solar sector, buoyed by ambitious national targets and strong internal demand, possesses the inherent resilience to navigate these challenges. Investors are advised to exercise caution, focus on fundamentally strong players with diversified revenue streams, and maintain a long-term perspective on India's burgeoning renewable energy landscape.

Q: Why did the US impose such high duties on Indian solar imports? A: The US Commerce Department determined that Indian solar cell and panel manufacturers receive unfair government subsidies, which allow them to undercut prices for domestically produced solar products in the US market.

Q: Which Indian solar companies are most affected by these new duties? A: Companies with significant export operations to the US, such as Waaree Energies, Premier Energies, and Vikram Solar, are directly and heavily impacted. Other solar-linked stocks like Adani Green Energy and Borosil Renewables also saw declines.

Q: How does this impact the earlier US-India trade deal announced in February 2026? A: The earlier trade deal had reduced tariffs to 18%, which had positively impacted Indian solar stocks. However, these new countervailing duties of 126% override the previous tariff reductions specifically for subsidized solar imports, essentially nullifying the benefit for these products in the US market.

Q: What are the options for Indian solar manufacturers? A: Indian manufacturers may explore shifting their focus more intensely to the robust domestic market, driven by India's ambitious renewable energy targets. They could also seek to diversify their export markets to regions like Europe, the Middle East, and Africa, where demand for solar products is growing.

Q: Is this a permanent measure? A: These duties are preliminary. The US Commerce Department is expected to make final determinations later in the year, but the high preliminary rates take immediate effect, requiring importers to post cash deposits on new shipments.

Disclaimer: For information only; not investment advice. Stock market investments carry risks. Please consult a SEBI-registered advisor before investing. FinScann assumes no liability for decisions made based on this report.