US Tariffs, China Panels Buoy Adani's Twin Solar Businesses

The US clampdown on Chinese solar panels has landed the Adani Group in a win-win situation—the restriction has opened up the American solar market for one Adani group firm making cells and panels, while another Adani firm building the world's largest solar park in India buys panels from third parties, including Chinese and domestic firms.

- Nehal Chaliawala

The US has spared Indian solar panels from the stiff tariffs it has imposed on a range of goods, benefitting several domestic firms including Mundra Solar PV Ltd (MSPVL), a step-down subsidiary of Adani Enterprises Ltd making such panels at Mundra in Gujarat. Just three hours away by road, Adani Green Energy Ltd is building the world's largest solar park of 30GW at Khavda, with China's JinkoSolar and LONGi as its top solar panel suppliers.

Exporting panels from one company and importing them for the other helps the Adani Group make the most of the volatile global tariff scenario, as each business prioritizes what's best for its shareholders.

While lucrative, this arbitrage may be short-lived, with India already clamping down on imported solar panels.

Adani's strategy contrasts with other players like Tata Power and Waaree Energy, which utilize in-house panels for constructing their own solar power plants.

Credit rating agency India Ratings upgraded MSPVL's rating by a notch to Ind A+ in April. "Export sales have been yielding higher margins on account of robust demand, specifically from the US, which has disincentivized imports from China. As a result, India has become a key exporter of solar modules to the US," a credit note from the rating agency said on 2 April.