US Trade Deal Throws Lifeline to India’s Renewables Stocks

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(Bloomberg) — India’s renewable energy stocks are starting to shake off their status as stragglers after President Donald Trump’s surprise trade deal with the nation.

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Since the accord was unveiled last week, some of the country’s clean power stocks have ranked among the top gainers on a Bloomberg gauge of global peers after kicking off the year as laggards. Solar-energy firms Insolation Energy Ltd. and Oriana Power Ltd. have both surged more than 24% in February, recouping most of January’s losses.

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Strategists and fund managers are assessing whether the rebound can sustain. The trade agreement halves tariffs on Indian goods to 25%, with a further cut to 18% once an interim deal is signed. The lower levies reopen the world’s largest economy to the South Asian nation and helps ease concerns about oversupply at home.

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“We’re seeing renewed interest in India broadly and in the energy transition in India, specifically, post-trade deal,” said Aniket Shah, head of sustainability and transition strategy at Jefferies Group LLC.

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The sector had been under pressure for months. Companies grappled with fears of a solar supply glut and slowing exports as Chinese producers undercut prices, and delays in building transmission infrastructure. Even so, the industry pushed ahead with expansion plans to meet Prime Minister Narendra Modi’s pledge to boost clean power capacity to 500 gigawatts by 2030 and reduce reliance on fossil fuels. 

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Pricey valuations have also tempered enthusiasm. Adani Green Energy Ltd., one of India’s biggest renewable energy producers, trades at 42 times forward earnings, data compiled by Bloomberg show. JSW Energy Ltd. and HBL Engineering Ltd. fetch multiples of about 30 times, versus 22 times for Bloomberg’s global sector gauge.

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While some companies have been richly valued based on long-term prospects, execution issues are prompting investors to rethink how much they are willing to pay up for potential growth, said David Smith, senior investment director of Asian equities at Aberdeen Group Plc.

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Valuation concerns have kept him out of the sector for the past six to nine months.

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Easier access to US buyers could support earnings. The US has been India’s dominant solar export destination for years, accounting for 97% of its solar module shipments in the first half of 2025. 

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Higher tariffs had threatened to make the trade unviable. With levies now lowered, Indian producers may be able to better compete with regional rivals, according to Prashant Paroda, a portfolio manager for Allspring Global Investments.

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“If there is a rebound in exports, maybe to the US, you could see some sort of revival in these stocks,” he said.

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