Indian Curbs on Solar Imports Spark U.S. Coplaint at WTO

The U.S. lodged a complaint at the World Trade Organization against India’s restrictions on imports of solar equipment, saying domestic-content requirements violate global commerce rules.

India compels solar-energy producers to use domestically manufactured solar cells and modules and gives subsidies to developers who use domestic equipment rather than imports, the U.S. Trade Representative’s office said today in an e-mailed statement from Washington. These requirements restrict India’s market to U.S. imports, the USTR said.

The U.S. “strongly supports the rapid deployment of solar energy around the world, including with India,” outgoing trade chief Ron Kirk said in the statement. “Unfortunately, India’s discriminatory policies in its national solar program detract from that successful cooperation, raise the cost of clean energy and undermine progress toward our shared objective.”

The administration of President Barack Obama already has confronted China on its solar-energy policies as competition in Asia increases amid price plunges. The U.S. said it has discussed its concerns with Indian officials for the past three years, including at the U.S.-India Trade Policy Forum and the U.S.-India Energy Dialogue, as well as in WTO committees.

Lawmakers React

“India isn’t playing by the rules, and USTR is right to go to the WTO to hold it accountable,” Representative Dave Camp of Michigan, the Republican chairman of the House Ways and Means Committee, said in a statement.

Other Republicans including Representative Devin Nunes of California, head of the committee’s trade panel, and Senator Orrin Hatch of Utah, the ranking member on the Finance Committee, supported the complaint.

The Solar Energy Industries Association, based in Washington, said India’s “use of discriminatory localization barriers” is a growing trend that must be reversed. In a statement, Rhone Resch, the group’s president, said the U.S. was right to challenge India’s trade practices.

Since January 2010, Indian developers of solar photovoltaic projects using crystalline silicon technology must use solar modules manufactured domestically, according to the USTR. The domestic-sourcing requirement was later expanded to include crystalline silicon solar cells.

Expansion Possible

India has said it may further expand the scope of the domestic-content requirements to include thin-film technologies, which comprise the bulk of U.S. solar exports to India, the USTR said. India also guarantees solar-energy developers that the government will buy a certain amount of solar power at a subsidized tariff rate, provided they use domestic solar equipment rather than imports.

Today’s request for consultations is the first step in WTO dispute proceedings and means the two governments must hold talks for at least two months in a bid to resolve the matter. If the discussions fail, the U.S. can ask WTO judges in Geneva to rule.

The U.S. has now lodged six complaints against India at the WTO. India has challenged the U.S. eight times at the trade arbiter.

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