Short answer: Solar is an industry where trade policy decides more than production cost. The US — the largest consumer market — has imposed anti-dumping/countervailing duties (AD/CVD) on solar products from several Southeast Asian countries, including Vietnam; duty rates can reach tens or hundreds of percent, enough to erase margins entirely. India shields its domestic market with import duties and an approved-models list, but exports from India to the US face the same risk system. This article works through Vietnam’s legal framework (as of 18 October 2026) against India’s at a high level — and a solar-plant location analysis must start from the trade-remedy duty map, not from electricity prices.
1. Trade-Remedy Risk: The Number-One Variable
Before comparing costs, the investor must answer: how much duty will your goods face entering the destination market?
- US market: The US has run AD/CVD investigations on solar cells and modules imported from Cambodia, Malaysia, Thailand and Vietnam, with preliminary/final duty rates at high levels for many companies. Each case evolves over time — investors must check the duty rate for the right company group/country at decision time, because last year’s figure may already be obsolete.
- Supply chain and duty circumvention: The US simultaneously investigates circumvention of trade-remedy duties via transhipment and minor assembly. A plant doing only final module assembly from imported cells may fall within expanded scope — the depth of processing in the host country is part of the legal analysis, not just a cost question.
- Indian market: India applies import duties (Basic Customs Duty) on imported modules and operates an Approved List of Models and Manufacturers (ALMM) for policy-supported solar projects — effectively a technical barrier to imported modules. A plant in India serving Indian domestic demand avoids these barriers, but exports to the US face the same AD/CVD risk system as any other origin.
Takeaway: for solar, there is no “Vietnam or India” answer independent of the destination market. Draw the duty map for each (producing country → destination) pair before comparing any other cost.
2. Vietnam’s Legal Framework for a Solar Plant
- Investment: The Law on Investment No. 143/2025/QH15 (effective 1 March 2026) + Decree No. 96/2026/ND-CP — IRC issuance. Solar-module manufacturing is open to foreign capital; hi-tech, clean-energy projects may qualify for location- and sector-based investment incentives.
- Land: The Land Law No. 31/2024/QH15 (effective 1 August 2024) — land lease inside industrial parks; Decree No. 35/2022/ND-CP. Solar plants need large areas for lines and warehousing; some projects combine the plant with rooftop solar for partial self-supply — rooftop solar has its own development rules and should be kept distinct from the manufacturing project.
- Environment: The Law on Environmental Protection No. 72/2020/QH14 — environmental impact assessment and environmental licence. PV cell production uses chemicals (acids, alkalis) and generates industrial wastewater; glass and aluminium-frame stages have their own environmental requirements. This is an environmentally heavy industry, not “clean industry” in the procedural sense.
- Labor: the 2019 Labor Code; Decree No. 219/2025/ND-CP (effective 7 August 2025) for foreign specialists.
- Tax: 20% CIT + incentives (clean-energy, hi-tech projects may qualify by location/sector); the global minimum tax (Resolution No. 107/2023/QH15, Decree No. 236/2025/ND-CP) applies if the group exceeds EUR 750 million.
- Export: customs under the Customs Law No. 54/2014/QH13; certificates of origin (C/O) for FTA markets. Note: amid circumvention investigations, origin documentation and evidence of actual processing in Vietnam must be complete and consistent.
3. Four Comparison Variables
- Trade-remedy duty map per market pair. For each destination (US, EU, Indian domestic…), look up current AD/CVD duties on goods from Vietnam and from India. This variable carries the heaviest weight.
- Depth of manufacturing. Which stages the plant covers: ingot/silicon pulling, wafering, cell-making, or module assembly only? Deeper processing means a stronger position in trade-remedy cases — but capital and environmental demands rise exponentially.
- Host-country domestic policy. India: import barriers + an approved list create a “home field” for domestic production serving India. Vietnam: export-oriented, no equivalent domestic barrier — but also no protected “home field”.
- Power and water for production. Cell/wafer production consumes large power and water volumes; industrial power pricing, grid stability and water sources at the park are long-run operating costs.
| Factor | Vietnam (current framework) | India (high-level framework) |
|---|---|---|
| AD/CVD risk into the US | Existing AD/CVD cases on goods from Vietnam | Exports from India to the US face the same risk system |
| Domestic market | No equivalent protective barrier | Import duties + approved list (ALMM) |
| Investment procedure | IRC under Law on Investment 143/2025 + Decree 96/2026 | Own investment approval framework |
| Incentives | Location/sector incentives (clean energy, hi-tech) | Domestic-manufacturing incentive framework |
India’s framework is high-level only; details to be checked by local counsel. AD/CVD rates change per case — check at decision time.
4. Worked Scenario: A 2 GW Module Plant for the US
Suppose you invest in a 2 GW/year module-assembly plant, 90% for the US:
- Step 1: Look up current US AD/CVD duties on modules from Vietnam (by company group) and from India. Compute the margin left after duties — if duties swallow the margin, production-cost comparisons become meaningless.
- Step 2: Design the processing depth: module assembly from imported cells only, or add a cell line? Assess capital, environmental demands (chemicals, wastewater) and legal position amid circumvention probes.
- Step 3: For Vietnam: IRC (note hi-tech/clean-energy incentive eligibility), industrial-park land, EIA/environmental licence for chemical stages, origin certification for exports.
- Step 4: Contingency: if the US expands investigations to new origins, which markets could the plant pivot to (EU, Middle East, domestic)? Market flexibility is part of the location decision.
5. First-30-Days Checklist
- Draw the AD/CVD duty map for each (producing country → destination) pair with the exact product classification.
- Decide processing depth (cells vs modules only) on capital, environmental and legal-position grounds.
- Check the latest developments in relevant trade-remedy cases — never use last year’s figures.
- For Vietnam: IRC, IP land, EIA, origin documentation.
- Engage international trade counsel to assess AD/CVD risk for your exact supply-chain model.
This article is for general reference only and does not replace legal advice for your specific case. Trade-remedy duty rates change per case and period; details of Indian law should be checked by local counsel.
Frequently Asked Questions
1. Why can’t we just compare production costs when choosing a solar plant location?
Because the destination market’s anti-dumping/countervailing duties (especially the US) can reach tens or hundreds of percent — enough to erase every production-cost advantage. A low-cost plant whose goods face high AD/CVD duties loses to a higher-cost plant with no duties. The duty map must be drawn before any other cost comparison.
2. What legal trade risk does a module-assembly-only plant face?
Amid US circumvention investigations, simple assembly from imported components may fall within expanded duty scope. Deeper in-country processing (cells, even wafers) strengthens the legal position but demands far more capital and environmental management. This trade-off needs case-specific international trade counsel.
3. Can a solar project in Vietnam get investment incentives?
Possibly. Solar-module manufacturing sits in clean energy and hi-tech, which may qualify for location- and sector-based incentives (time-limited CIT exemption/reduction). Specific conditions depend on the park location and project scale — check the current incentive schedule when preparing the IRC.
4. What origin certification is needed to export solar modules from Vietnam?
Depending on the destination and applicable agreement, businesses obtain Certificates of Origin (C/O) as regulated. Amid circumvention investigations, origin evidence and proof of actual processing in Vietnam (input purchase contracts, production routings, consumption norms) must be complete and consistent — not just customs paperwork but a legal shield.
5. Is India’s domestic market a “safe home field” for solar?
India shields domestic demand with import duties and the ALMM approved list, favouring India-based production for local needs. But that “home field” comes with localisation and list-compliance demands — and exports to the US from India face the same AD/CVD risk system as other origins. No market is absolutely safe.
This article has been quality-reviewed by the FLAW AI Legal Council
