US to take India to WTO for imposing domestic content rules on solar developers

PUBLISHED : Tuesday, 11 February, 2014, 3:09pm
UPDATED : Tuesday, 11 February, 2014, 4:57pm

The United States said on Monday it would take India to the World Trade Organisation to gain a bigger foothold for US manufacturers in its fast-growing solar products market.

The US said it was filing its second case at the WTO over the domestic content requirements in India’s massive solar programme, which aims to ease chronic energy shortages in Asia’s third-largest economy.

US Trade Representative Michael Froman said making Indian solar developers use locally made equipment discriminated against US producers and could hinder the spread of solar power.

“Domestic content requirements detract from successful co-operation on clean energy and actually impede India’s deployment of solar energy by raising its cost,” Froman said.

It is the second time in a year that Washington has sought a consultation at the WTO – the first stage in a dispute process that can lead to sanctions – over India’s Jawaharlal Nehru National Solar Mission.

The US issued its first challenge to India’s solar programme in February last year when it formally requested consultations over its first stage.

The programme aims to double India’s renewable energy capacity by 2017.

Domestic content requirements detract from successful co-operation on clean energy and actually impede India’s deployment of solar energy by raising its cost
US Trade Representative Michael Froman

US officials had hoped a second phase of the programme would address Washington’s concerns but now fear the harm to American producers would likely be even greater, because the rules were expanded in October to cover so-called thin-film technology, which underlies the majority of US solar product exports to India.

India hit back at the initial US accusations in April, asking Washington to justify its own incentives offered to US companies that use local labour and products in renewable energy and water projects.

The Indian embassy in Washington was not immediately available for comment on the latest trade action.

India has argued its solar policies are legal under WTO government procurement rules that permit countries to exempt projects from non-discrimination obligations.

The country is widely perceived in Washington as a serial trade offender, with US companies unhappy about imports of products ranging from shrimp to steel pipes that they say threaten jobs.

The US International Trade Commission is scheduled to hold a hearing on Wednesday and Thursday into complaints of trade barriers erected by India.

There are 14 past or current World Trade Organisation cases between India and the United States.

 

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