The United States and India have reached a significant milestone in their trade relationship, agreeing to reduce reciprocal tariffs on a range of Indian goods, including solar modules and energy storage components.

Under the agreement, announced on February 3, 2026, reciprocal tariffs on Indian products entering the U.S. market will be lowered from 25% to 18%. The deal also includes the removal of a 25% penalty tariff that had previously been imposed on India due to its trade ties with Russia.

With both the penalty tariff rescinded and the base reciprocal tariff reduced, the overall tariff burden on Indian solar exports to the United States is expected to decline sharply—from around 50% to approximately 18%. The move is expected to provide meaningful relief to project developers and manufacturers active in the U.S. solar market.

The White House confirmed that the agreement is contingent on India’s commitment to purchase $500 billion worth of U.S. energy and technology products over a five-year period. As part of the deal, India has also agreed to shift a portion of its energy imports away from Russia toward suppliers in the United States and Venezuela.

India has emerged as an increasingly important supplier of solar equipment to the U.S. market. According to JMK Research and Mercom Capital, India exported 10.4 GW of solar modules to the United States during the first nine months of 2025. The U.S. accounted for roughly 97% of India’s total solar module exports over the past year.

Data from PL Capital show that India’s share of total U.S. solar module imports rose to about 11% in 2024–2025, up from approximately 3% in 2022, highlighting the country’s growing role in the U.S. solar supply chain.