India US Solar Dispute Escalates

India and US are currently fighting it out at the WTO because of the domestic content requirement which is a part of India’s solar energy programme.

Many other nations have requested to become members as the dispute has strong implications for the other countries also. EU, Brazil, Norway, China, Canada, Malaysia, Russia, Turkey, Korea and Japan have requested the WTO, India and the US for the same. It would allow these nations to get information and stay abreast with the proceedings even though they wouldn’t actually be party to the dispute.

The dispute settlement was initiated by the US which was not happy with the local content rules, a hallmark of India’s National Solar Mission. Both EU and Japan have earlier held arguments and emerged as winners against Canada at the WTO.

India’s position is that the power produced is going to be purchased by government and so it falls outside WTO provisions. India cleverly has also put in place a plan to impose anti-dumping duties so even if the ruling goes against India, it doesn’t stand much to lose as the solar industry will continue to get protection provided the Finance ministry approves the Commerce ministry recommendations for levying anti- dumping duties. First solar had filed a case also which was rejected because the court noted that the move was not yet finalised.

If approved finally- anti-dumping duties of up to $0.48 per watt will be imposed on solar cells from the US and $0.81 per watt from China, and $0.62 per watt from Malaysia and $0.59 per watt from Taiwan.

India’s different ministry departments are also divided over the move and the MNRE (Ministry of New and Renewable Energy) had expressed its opinion against the Ministry of Commerce decision to levy anti-dumping duty on imported solar cells.

MNRE felt that the move could work against the growth of the solar industry.