Bloomberg News

U.S. Files Second Case Against India on Solar-Energy Policy (1)

February 10, 2014

The U.S. filed a second complaint against India’s solar-energy policies at the World Trade Organization, reviving a year-old dispute between the two nations.

Today’s action follows a case the U.S. filed in February 2013 at the Geneva-based WTO, saying India’s requirements for locally made components on solar-energy products violate global trade rules.

“These domestic content requirements discriminate against U.S. exports” of solar cells and modules, U.S. Trade Representative Michael Froman said today at a news conference in Washington.

Officials from the Indian Embassy in Washington didn’t immediately respond to a request for comment.

The U.S., which has supported its own solar-manufacturing industry through loan guarantees, exported $119 million worth of solar-industry gear to India in 2011, and sales have declined since then, according to the U.S. trade office. In 2012, India, the second-largest export market for U.S. solar producers after Japan, plans to expands its solar-manufacturing industry by 20 times by 2020, according to the agency.

The U.S. trade office notified India today that it’s requesting consultations at the WTO to resolve the dispute. If the matter isn’t resolved in 60 days, the U.S. can request creation of a special panel at the WTO to hear the case.

‘Political’ Message

Rhone Resch, president of the Solar Energy Industries Association, a Washington-based industry group, said the U.S. action was “justified and necessary,” according to a statement. The National Association of Manufacturers, another Washington-based trade group, said it was an important step in leveling the playing field for U.S. workers.

“The main message is political, that the U.S. will not turn a blind eye to strategic government support for a local manufacturing industry in the developing world,” Jenny Chase, manager for solar insight at Bloomberg New Energy Finance in Zurich, said in an e-mail.

She said the U.S. action may be a pre-emptive move aimed at India’s proposal to close a loophole favoring First Solar Inc. (FSLR:US) of Tempe, Arizona. The company’s “thin film” solar modules avoid India’s local content requirements by not using crystalline silicon to convert sunlight to energy, Chase said.

Trade between the U.S., the world’s largest economy, and India, the third-biggest economy in Asia, has increased fourfold since 2005, S. Jaishankar, India’s ambassador to the U.S., said in an interview at Bloomberg’s Washington office on Jan. 30. Commercial ties can expand the “relatively small economic relationship” between the nations, he said.

To contact the reporter on this story: Brian Wingfield in Washington at bwingfield3@bloomberg.net

To contact the editor responsible for this story: Jon Morgan at jmorgan97@bloomberg.net


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