A suggestion made last month by Indian energy minister Piyush Goyal that the country would engage in a tit-for-tat trade dispute with the U.S. was confirmed this week when commerce and industry minister Nirmala Sitharaman confirmed in Parliament that the government will file 16 cases.
Asked "whether it is a fact that the government is going to file 16 cases against the U.S. for violating World Trade Organization (WTO) treaties", Sitharaman replied in the affirmative, stating that certain renewable energy programs in the U.S. are allegedly "inconsistent with WTO provisions".
Particularly, the minister suggested that the U.S. has failed to respect its obligations under the General Agreement on Tariff and Trade (GATT) 1994, pertaining to subsidies and countervailing measures.
India recently lost a case against the U.S., with the WTO ruling that Indias local content requirements for solar components were in violation of global trade rules. India has since appealed before the WTO appellate body against those findings, and in April Goyal told a gathering of solar representatives that India will not "bow to this kind of pressure" exerted by perceived U.S. might, adding: "I will soon come out with a policy to further encourage manufacturing in India. In fact, I am going to file 16 cases of their [U.S.] violations of WTO policies."
Under Indias National Solar Mission (NSM), certain limits are placed on the use of foreign-made solar components for PV projects, with the government paying up to Rs. 1 crore per MW for those developments that place orders with domestic suppliers.
The requirement is intended to ensure Indias solar manufacturers are protected and supported during the current and forthcoming solar boom, with the country working towards a 2022 target of 100 GW of installed solar PV capacity.
However, in February consultancy firm Bridge to India told pv magazine that the local content requirements account for less than 5% of total module demand in the country, adding that the disputed ruling had not delivered the long-lasting shot-in-the-arm for domestic manufacturing that the government had hoped for.
Following Goyals comments last month, Mercom Capital CEO Raj Prabhu lamented the impasse, telling pv magazine that "nobody wins in trade wars", and suggesting that, by filing 16 cases with the WTO against the U.S., such actions could only serve to make the situation worse.
According to the Economic Times, Indian ministers are hoping to arrange a series of bilateral meetings to discuss this issue with U.S. officials. From Indias perspective, there is a contradiction in the U.S. targeting Indias domestic content requirements while giving subsidy and support to their own solar programs.
"The U.S. has its own subsidy programs at the sub-federal level," an anonymous official told the Indian newspaper. "If they are comfortable with their own subsidies, then why target us? We want separate consultations with them outside the WTO."