US applies solar 'power', India stays cool

The United States has said that it will take India to the WTO to open up its solar industry, raising a new dispute weeks after a bitter feud over a diplomat’s arrest.

The United States has asked for talks under the World Trade Organization to change India’s requirements for the use of domestic content as part of the energy-hungry country’s ambitious plan to boost its solar power generation plans.

“This kind of discrimination is against WTO rules and we are determined to stand up for US workers and businesses,” US Trade Representative Michael Froman told reporters on Monday.

Froman insisted that the action was consistent with calls by President Barack Obama’s administration to work with India on renewable energy. “Domestic content requirements detract from successful cooperation on clean energy and actually impede India’s deployment of solar energy by raising the cost,” Froman said.

Under the WTO process, the Geneva-based body would set up talks between the United States and India to find a solution. If the consultations do not succeed within 30 days, the United States could ask the WTO to set up a panel to settle the dispute.

The move comes after US authorities in December arrested a New York-based Indian diplomat on charges of underpaying her servant and lying on the worker’s visa application, setting off one of the worst rifts in years between the countries.
The row abated a month ago when the diplomat, Devyani Khobragade, was allowed to return to India just as she was indicted.

Will respond, says India

“India will respond at the WTO adequately,” Trade Minister Anand Sharma said on Tuesday. “We may also have some issues with them on solar. We may also have an application or may move the WTO.”

“Our current policy is WTO compliant. Of course, they (US) are accusing, that’s why they are challenging us. We will defend it,” Commerce and Industry Secretary Rajeev Kher said.

The US had in February last year challenged the domestic content requirements under Phase I of the National Solar Mission.

“If you look at the Phase II contracts, you will see that most of the contracts have gone to American companies. So they have participated in those bids and many of them have succeeded,” Kher said.

He said India is examining “equally restrictive policies” followed in the US. “We had clear evidence of 13 odd states there which follow equally restrictive policies as they allege against us. So, we are now examining those policies.”

India has reserved 375 MW of the total capacity of 750 MW under Batch-I of Phase-II for bidding with domestic content requirement, which requires solar cells and modules used in the solar photovoltaic power plants to be made in India.