India challenges United States on solar industry subsidies

April 22, 2013 at 3:19 PM
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NEW DELHI, April 22 (UPI) -- India has filed a complaint to the World Trade Organization's dispute settlement body, saying that the United States is offering subsidy programs in the solar industry for local content requirements.

The action, reported by India's Business Standard newspaper, follows a complaint launched by the United States in February with the WTO regarding India's National Solar Mission, specifically India's photovoltaic domestic content requirements policy, which the United States says is discriminatory against U.S. solar manufacturers.

PV Tech reports that the India's domestic content requirement applies only to crystalline silicon-based modules and thin film is exempt. However, this has resulted in companies importing thin-film technologies to the detriment of its domestic module manufacturers.

India's complaint says the U.S. practice of subsidy programs in the solar sector occurs at both federal and state levels and makes the entry of Indian companies difficult and also breaches global trading rules, the Standard reports.

Such subsidy programs violate the WTO's Trade Related Investment Measures agreement, the complaint says.

Ajay Goel, chief executive of Tata Power Solar, India's largest solar power company said the United States offers a number of incentives to domestic companies to protect them from foreign competitors.

"Preferential treatment is given to U.S. manufacturers," Goel was quoted as saying by the newspaper.

As a result, he said, "we have not been able to make much inroads there. We have a bunch of investments on hold because of this."

Moser Baer Solar said it had to drop the U.S. market.

"By giving varied incentives for use of their local content, a large number of the states in the US made it unviable for us to do business there," said Deepak Puri, chairman and managing director, Moser Baer India Ltd.

But to appease the United States, India's Ministry for New and Renewable Energy plans to have two project categories for its solar mission program, one with mandated domestic content and one that allows imported equipment, the Hindu reported Sunday.

Speaking last week at the Fourth Clean Energy Ministerial, Indian Prime Minister Manmohan Singh touted India as a base for solar production for domestic supply as well as exports.

"As we expand our reliance on solar energy, we are keen to ensure induction of the best technology and also encourage domestic production of the equipment needed," he said.

"India is potentially a large market for production of such equipment. It is also a potentially competitive attractive production base for supplying to other countries. We, therefore, encourage global manufacturers to set up production facilities in this area."

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