The U.S. government has filed a complaint against India with the World Trade Organization (WTO), claiming aspects of the Indian government’s solar expansion plan break global trade rules.
As part of it’s National Solar Mission (NSM), which aims to deploy 20,000 MW of solar by 2022, the Indian government is requiring that solar power developers must use solar panels and cells made in India.
The NSM has three Phases, now entering Phase II. The first Phase also had a domestic content requirement that the U.S. filed a complaint about. But in Phase II, the requirement to use Indian-made solar extends to thin film technology, which makes up the bulk of U.S. solar exports to India and was exempt in Phase I.
A rooftop solar installation in Gujarat. Credit: Azure Power
“These domestic content requirements discriminate against U.S. exports by requiring solar power developers to use Indian-manufactured equipment instead of U.S. equipment,” said United States Trade Representative Michael Froman.
“These unfair requirements are against WTO rules, and we are standing up today for the rights of American workers and businesses,” he added.
The U.S. Trade Representative also noted that protectionist measures like a domestic content requirement harm the expansion of solar worldwide, not just in the U.S. – a view reiterated by the U.S. solar lobby group.
“These types of ‘localization’ measures not only are an unfair barrier to U.S. exports, but also raise the cost of solar energy, hindering deployment of solar energy around the world, including in India,” said Froman.
“Localization barriers are a growing threat to U.S. solar exports and clearly violate WTO rules. Over the past three years, the U.S. government has provided India every opportunity to remove restrictive and unfair marketplace requirements,” said Rhone Resch, president and CEO of the Solar Energy Industries Association.
“In the absence of any meaningful effort by India to find common ground, it’s now time for the WTO to finally resolve these long-festering issues.”
The U.S. has requested consultations, the first step in the WTO dispute settlement process. If after 60 days, India and the U.S. fail to resolve the issue through negotiations, the United States may ask the WTO to establish a dispute settlement panel.
