Feb. 11 – This United States (U.S.) has filed a complaint with the World Trade Organization (WTO) that challenges India’s national solar program, claiming that it discriminates against foreign solar products. According to the U.S., India’s solar program, which was initially launched in 2010, requires producers to utilize Indian-manufactured solar cells and modules. This ‘forced localization’ has resulted from the subsidies the Indian government has offered for using domestically produced equipment instead of foreign imports.
“Let me be clear: the United States strongly supports the rapid deployment of solar energy around the world, including with India,” said U.S. Trade Representative Ron Kirk. “Unfortunately, India’s discriminatory policies in its national solar program detract from that successful cooperation, raise the cost of clean energy, and undermine progress toward our shared objective.”
A senior Indian government official, however, has stated that India’s solar program complies with WTO rules. Speaking to the Wall Street Journal, the government official clarified that India’s solar program insists on local sourcing only for certain items, and that it does not prevent the importation of foreign equipment.
The U.S.’s complaint seeks to ensure that foreign goods and services are treated the same as their respective domestic counterpart. The U.S. has previously engaged India regarding its solar program, but to no avail. Now, if the matter is not resolved through consultations in the next 60 days, the U.S. may request the establishment of a WTO dispute settlement panel.
“Trade enforcement is critical for ensuring that our clean energy goods and services can compete on an equal footing around the world,” said Kirk. “We will not hesitate to enforce our rights under our trade agreements on behalf of American workers and manufacturers.”
Dezan Shira & Associates is a specialist foreign direct investment practice, providing corporate establishment, business advisory, tax advisory and compliance, accounting, payroll, due diligence and financial review services to multinationals investing in emerging Asia. Since its establishment in 1992, the firm has grown into one of Asia’s most versatile full-service consultancies with operational offices across China, Hong Kong, India, Singapore and Vietnam as well as liaison offices in Italy and the United States.
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