U.S. Customs Detains $43 Million in Indian Solar Panels Under Forced Labor Law

The U.S. Customs and Border Protection (CBP) has detained Indian electronics equipment worth $43 million, including solar panels, since October under the Uyghur Forced Labor Prevention Act (UFLPA). The UFLPA, enacted in 2022, prohibits the import of goods made with forced labor from China’s Xinjiang region, a place where Uyghur and other Muslim minorities are reportedly subjected to human rights abuses. The U.S. government's enforcement of this law has recently intensified, particularly scrutinizing solar products made with polysilicon, a crucial material in solar panels, sourced from regions associated with forced labor.

Shift in Enforcement: Indian Manufacturers Under Scrutiny

This recent enforcement marks a significant shift in the CBP’s approach, as Indian manufacturers face the brunt of UFLPA enforcement for the first time. Previously, the agency's focus was predominantly on Chinese suppliers. The detention of Indian shipments suggests a broader crackdown on solar panel imports, regardless of the manufacturing country. Notably, nearly one-third of the detained shipments from India have been denied entry into the U.S., a stark contrast to the 5.4% rejection rate for top suppliers from Malaysia, Vietnam, and Thailand.

Impact on Indian Solar Panel Imports

The surge in detentions has raised concerns among Indian solar manufacturers, who have become key players in the U.S. market amid escalating restrictions on Chinese goods. In 2024, imports of Indian solar panels to the U.S. more than doubled, accounting for 11% of U.S. panel imports in the second quarter. However, this growth is now threatened due to the increased scrutiny under the UFLPA.

Trade experts speculate that the origin of the solar cells used in Indian panels may be contributing to the rise in detentions. “If the solar cells for Indian panels are coming from China, then there is likely a good reason why detentions of Indian products may be increasing,” said Tim Brightbill, a trade attorney with Wiley Rein LLP. This statement underscores the complexities faced by Indian manufacturers in sourcing components while ensuring compliance with U.S. regulations.

Major Indian Companies Affected

Prominent Indian solar companies, including Waaree Technologies and Adani Enterprises, have been impacted by these detentions. Adani Enterprises confirmed that some of its shipments were detained but were later released after meeting compliance checks. “This outcome reaffirms that our products imported into the U.S. fully comply with UFLPA regulations, reinforcing customer confidence in the quality, reliability, and legal adherence of our products and manufacturing,” a spokesperson for Adani said.

Navigating Compliance and Market Access

The increased detentions pose a significant challenge for Indian manufacturers aiming to position themselves as viable alternatives to Chinese products in the global solar market. As U.S. developers become increasingly cautious about potential delays and tariffs, the future of Indian solar exports may hinge on manufacturers’ ability to navigate the complexities of UFLPA compliance. This development highlights the ongoing challenges in the global supply chain, where ethical sourcing and regulatory compliance are becoming critical factors for market access.