In the wake of reports that the World Trade Organisation (WTO) has ruled in favour of the US over its complaint about India’s local content policies for solar equipment, an American Trade representative has said that the US supports the rapid deployment of solar energy in India.
However, analyst firm, Bridge to India has described the claims as “misleading” and said that time that could have been spent on investing in and collaborating on solar has been wasted in trade courts.
In February 2014, the US lodged its complaint about India’s requirement for some PV projects, which are awarded contracts under its JNNSM national solar mission to use locally produced cells and modules.
Responding to questions on the reported ruling in favour of the US, Andrew Bates, a spokesperson for the US Trade Representative, said that the US will work to ensure that the best products and technologies are available to global consumers “regardless of the country of origin”.
He added: “In line with the numerous actions President Obama has taken to advocate for clean energy at home and abroad, the US strongly supports the rapid deployment of solar energy around the world, including in India.”
However, Jasmeet Khurana, senior consulting manager at analyst firm Bridge to India, told PV Tech: “The persistent US action against India at the WTO regarding the domestic content subject could have been avoided. It was anticipated that the US would reciprocate India’s decision to drop anti-dumping investigations against US companies by not pursuing the case at WTO.
“At this point in time, countries should be investing into solar and collaborating to improve its competitiveness and not wasting their time in trade courts fighting each other.”
Khurana said that the Domestic Content Requirement (DCR) only accounts for a small portion of the market demand in India and the country’s decision to enforce DCR “does not come at the cost of stopping flow of global technology”.
He added: “In that sense, the statement by Bates is misleading. In fact, a majority of the equipment for Indian solar projects is still being imported and India is welcoming global companies to set up their manufacturing facilities in the country for both domestic sale and exports. Many companies have shown interest and their decision is not necessarily related to DCR.”
When media reports emerged last week about the WTO ruling, Khurana downplayed the long-term impact that it would have on India’s overall solar deployment. However, he also said that the ruling could result in delays for several ongoing and planned project allocations for private developers in India. Meanwhile the plans of any local manufacturer whose strategy relies on the DCR would be put on hold.
When the US first lodged its complaint in February 2013, Michael Froman, the US Trade Representative, told reporters: “These domestic content requirements discriminate against US exports by requiring solar power developers to use India-manufactured equipment instead of US equipment. These unfair requirements are against WTO rules.”
WTO members are not meant to impose national content requirements that discriminate against foreign products and rules dictate that governments must also treat imports on a par with domestically manufactured products. Thus the new ruling would require the Indian government to level the playing field for both foreign and domestic manufacturers of solar panels.