The US government has requested that the WTO investigate India’s domestic content requirements that form part of its solar procurement drive.
US Trade Representative Michael Froman has referred the country’s National Solar Mission to the WTO in reaction to its rules that some projects in the scheme must guarantee the use of domestic Indian components and labour.
“These domestic content requirements discriminate against US exports by requiring solar power developers to use Indian-manufactured equipment instead of US equipment,” said Froman.
“These unfair requirements are against WTO rules, and we are standing up today for the rights of American workers and businesses,” said Ambassador Froman. “We also take this action in support of the rapid global deployment of renewable energy. These types of ‘localisation’ measures not only are an unfair barrier to US exports, but also raise the cost of solar energy, hindering deployment of solar energy around the world, including in India,” he added.
Half of the latest 750MW round of bidding in the Indian procurement programme had a domestic content requirement attached. The rules apply to both thin-film and crystalline silicon technology.
While a number of other countries have established quota’s or bonus tariffs for domestic content, including Canada, South Africa and France, the Indian policy has attracted the most attention from the US.
“We strongly support today’s decision by US Trade Representative Michael Froman to move forward with a WTO case against India’s solar local content requirement,” said Rhone Resch, president and CEO of the Solar Energy Industries Association (SEIA) trade body.
“Localisation barriers are a growing threat to US solar exports and clearly violate WTO rules. Over the past three years, the US government has provided India every opportunity to remove restrictive and unfair marketplace requirements. 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,” said Resch.
A 4GW ‘mega ultra’ project in India announced this week that it intends to apply for funding from Washington DC-based World Bank.
US manufacturer First Solar has established a strong foothold in India with support of the US Ex-Im bank. The organisation has supported a number of solar projects in India.
In November last year, analysts Mercom predicted that the domestic content rule could lead to trade disputes.