US challenges India's domestic content requirement

11. February 2014 | Top News, Trade cases, Markets & Trends, Global PV markets, Industry & Suppliers | By:  Edgar Meza

The White House argues that India's domestic content requirements not only hinder international cooperation on clean energy but also make solar energy more expensive for the country.

PV manufacturing in India

The U.S. argues that India's domestic content requirements discriminate against American exports and violate WTO rules.

The United States announced on Monday that it was taking action against India for discriminating against U.S. solar power equipment exports.

If successful, the action could result in U.S. photovoltaic manufacturers gaining a larger share in India’s fast-growing solar market.

The White House said it had requested World Trade Organization (WTO) dispute settlement consultations with India regarding domestic content requirements in India’s national solar energy program.

In making the case for the complaint, U.S. Trade Representative Michael Froman said the United States was "challenging the domestic content requirements for solar power equipment imposed by India in 'Phase II' of its National Solar Mission. These domestic content requirements discriminate against U.S. exports by requiring solar power developers to use Indian-manufactured equipment instead of U.S. equipment," Froman said.

Declaring that India's domestic content requirements clearly violated WTO rules, Froman said the United States was "determined to stand up for U.S. workers and businesses."

Froman said the Obama administration was ensuring that American workers were not unfairly disadvantaged in the global marketplace and that a level playing field existed for American-made products and services overseas.

"To this end, the Obama Administration has expended tremendous efforts to enforce America's trade rights -- to bring home the full benefit of the rules and market access we have negotiated in our international trade agreements."

Froman added that the White House's action was consistent with the Obama administration's "strong support for the rapid development of renewable energy around the world, including in India. Domestic content requirements detract from successful cooperation on clean energy and actually impede India's deployment of solar energy by raising its cost."

The Obama administration's latest move follows its February 2013 challenge to domestic content requirements in Phase I of India's National Solar Mission.

"We hope that through these cases and other bilateral contacts, we will be able to dissuade India from continuing to impose domestic content requirements," Froman said.

The U.S. solar industry has expressed support for the action. Rhone Resch, president and CEO of the Solar Energy Industries Association (SEIA), described the move as "justified and necessary."

Resch added, "We strongly support today's decision by U.S. Trade Representative Michael Froman to move forward with a WTO case against India's solar local content requirement.  Localization barriers are a growing threat to U.S. solar exports and clearly violate WTO rules."

Resch pointed out that in the past three years, the U.S. government had "provided India every opportunity to remove restrictive and unfair marketplace requirements. In the absence of any meaningful effort by India to find common ground, it's now time for the WTO to finally resolve these long-festering issues."


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