India in retaliatory probe against trade protection to US solar power equipment makers

26 Mar 2016


In a tit-for-tat for the US getting the World Trade Organisation (WTO) to rule against India's domestic content requirements in its state-sponsored solar energy programme, the Indian government is considering moving the World Trade Organisation (WTO) against a related programme of American states that protect domestic manufacturers.

Stating this at an event orgainised by the Confederation of Indian Industry in New Delhi on Friday, Minister of State (Independent Charge) for Power, Coal and New and Renewable Energy, Piyush Goyal, said the mandatory domestic content stipulations in India's solar power generation programme is not an isolated case.

''There are at least nine US States which have similar programmes that give protection to domestic manufacturers. I am now examining them and after that we will file a case against the US,'' Goyal said.

''We will, of course, go and appeal against the WTO order. But we are ingenious enough in India to find an alternate mechanism to protect our manufacturers,'' he added.

While the Jawaharlal Nehru National Solar Mission aims to add 100,000 MW (100 GW) by 2022, the local content requirement is only for 8,000 MW (8 GW) for rooftop and land-based projects where the government provides a subsidy.

The excess power generated in the rooftop solar programme is being bought by state-run NTPC and since the whole programme is for state requirements, and is being implemented through a public sector agency, India has been arguing that the JNNSM qualifies as government procurement and is not covered by WTO rules.

WTO, however, rejected India's arguments and stated that the domestic content requirement was on power equipment and not on power that is bought by the government.

The government is now looking to protect domestic manufacturers through drfence purchases.

''It is very unfortunate that the US decided to pursue their case against India in the WTO. All that India has done is to protect domestic manufacturers who have so far given 400 MW of equipment to the installed capacity of 6,000 MW,'' he said.

Goyal said, ''When India scales up to a 100 GW, all that the Indian manufacturers can produce is about 15-17,000 MW over the next seven years. This would still leave more than 80,000 MW of market for the world. The US took a very myopic view.''

The minister also said if Indian manufacturers manage to prove a case of dumping against the US manufacturers, solar power will become expensive forcing the government to abort the solar programme.

 ''Our domestic manufacturers had won a complaint against US manufacturers for dumping their products in India which would have resulted in high anti-dumping duties. I personally persuaded the Indian manufacturers, and it was their magnanimity, who withdrew their request. If Indian manufacturers go back to seeking anti-dumping duties, solar power will again become expensive and we may have to abort the programme,'' said Goyal.

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