Currently, several large Indian firms export solar modules to the US, and new protectionist policies could add challenges, also because India imports a significant portion of its solar cells from China.
The future of India’s renewable energy exports to the US, particularly solar modules, could face challenges if the Trump administration reduces demand for eco-friendly imports. The impact could be severe on companies that are heavily reliant on the US for exports.
This assumes significance as Donald Trump, in his victory speech, mentioned that he would stop renewable projects on “day one” of his office. Currently, several large Indian firms export solar modules to the US, and new protectionist policies could add challenges, also because India imports a significant portion of its solar cells from China.
In the listed space, some of the large manufacturers and exporters in India include players like Tata Power, Adani Green Energy (Adani Solar), Premier Energies and Waaree Energies. The stocks have seen mixed returns. Tata Power stocks have gained around 2 percent in the last 5 days and fell around 3 percent in the last month. On the other hand, Waaree Energies shares have gained around 17 percent in the last five sessions.
“The topic (renewable energy) will definitely be in focus, though it’s uncertain if that will be positive or negative,” says Nirav Karkera, Head of Research, Fisdom. He adds that the Trump administration’s stance seems divergent to current clean energy and climate change narratives, and a lot of investment going into clean and renewable energy might see a shift in demand
He adds that some Indian companies, like Waaree, have a US export component in their revenue and may need to adjust their expansion plans if the US prioritises domestic manufacturing. “Although India is not a large exporter of solar modules to the US, some companies have set 2030 targets to expand internationally. A slowdown in the US’s renewable push could impact the global renewable energy market due to the size of the US economy and its high per capita energy consumption,” says Sankhe.
In terms of offshore wind, Trump’s stance also differs from Joe Biden’s pro-offshore wind policies. While Biden had identified sites with an estimated potential for 80-100 gigawatts, Trump’s policies may cut back on offshore wind investment due to high capital costs and tariff rates, suggests some experts.
Some green shoots visible too
While there are concerns, there are also some possible opportunities as well. With Trump’s anti-China stance and talks of tariffs on China, Siddhartha Khemka, Head of Research at Motilal Oswal Financial Services, believes the impact on India’s competitiveness in the sector will depend on tariff structures. “If tariffs are higher in China compared to India, then our competitiveness will definitely improve,” says Khemka, adding that Trump’s policies may give India an edge in certain markets.
Karkera concurs, “This situation might open opportunities for India as US tariffs and anti-dumping measures protect their domestic economy," but adds that the administration’s stance on Chinese imports could create additional hurdles. “The administration is expected to take a strong stance on this issue,” he says.