However, investors are now factoring in higher input costs, longer project timelines, and policy uncertainties. Funds love the India story, but are always ready with plan B—just in case another policy shift throws them off balance.

With Make in India and the Production Linked Incentive (PLI) schemes gaining momentum, the sector is betting on domestic resilience. The key question is whether Indian manufacturers can scale up quickly enough to offset the short-term impact of these tariffs.

4. Cost of Importing Solar, Wind, and Storage Equipment into India

India imports nearly $7 billion worth of solar equipment annually, with 62.6% coming from China. The recent 40% customs duty on solar modules and 25% on solar cells was meant to boost domestic manufacturing, but many developers argue that it has only made projects more expensive in the short term.

For wind energy, a similar issue persists. Turbine manufacturers rely on critical components from China and Europe. If import costs keep rising, India’s ambitious renewable energy targets could face delays.

5. The Biofuel Industry: A New Frontier or Collateral Damage?

The biofuel sector, often overshadowed by solar and wind (although outperforming them in terms of expected returns on investments), is also feeling the heat. India has aggressively pushed for ethanol targets, aiming for 20% ethanol in petrol by 2025. However, biofuel equipment and enzyme imports – many of which are sourced from the U.S. – could see price hikes.

One biofuel entrepreneur noted, “We thought we were the cool kids with government backing, but now we’re realizing even biofuels aren’t immune to trade wars.” With biofuel exports also facing uncertainties, India may have to recalibrate its strategy to ensure energy security and cost competitiveness.

6. The Way Forward: Navigating the New Trade Landscape

At Sidebar, we believe that while tariffs may create short-term disruptions, they also reinforce the need for India to double down on self-sufficiency. Industry leaders agree that the long-term play is to build resilient supply chains, attract global capital, and establish India as a key renewable hub.

That said, our legal and strategic advice to investors and promoters remains clear: stay agile, diversify markets, and be prepared for policy twists. As one solar CEO told us, “The only certainty in this business is that nothing stays certain for long.”

So, as we navigate this ever-evolving trade landscape, one thing is clear—the energy transition isn’t slowing down, it’s just getting a little more expensive.