US takes India to WTO on solar energy

2014-02-11 15:22
Solar energy is becoming financially viable, an industry player has asserted (Duncan Alfreds, News24)

Solar energy is becoming financially viable, an industry player has asserted (Duncan Alfreds, News24)

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Washington - The US said on Monday it was taking 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 US asked for talks under the World Trade Organisation to change India's requirements for the use of domestic content as part of the energy-hungry country's ambitious plan to boost solar power.

"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.

Froman insisted that the action was consistent with calls by US President Barack Obama's administration to work with India on renewable energy. The world's two largest democracies have both identified climate change as a major area for co-operation.

"Domestic content requirements detract from successful co-operation on clean energy and actually impede India's deployment of solar energy by raising the cost," Froman said.

Trade ties

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

Froman said that the Obama administration considered discussion of disputes part of "maturing" trade ties and that Monday's action "in no way detracts from the importance we attach to this relationship" with India.

An attorney at the US Trade Representative's office, speaking on condition of anonymity, said that WTO cases take time to complete and that the timing was not linked to other issues in US-India ties.

India is the biggest foreign market after Japan for the US solar industry, which supports an estimated 12 000 jobs but whose domestic growth has been in question. The US has also taken aim at China, accusing Beijing of unfairly subsidising green technology and dumping certain solar cells into the US market.

Justin Guay of the Sierra Club environmental group said that the latest action had "no rhyme or reason" as it comes at a time that the US is trying to protect its own solar industry.

"I think it sends a very damaging signal for the industry at a time when, if anything, we should be working to support the industry, essentially, at a war-time footing," he said.

The action marks the second time that the US has sought WTO consultations over India's solar programme. Environmental groups criticised the previous challenge in February 2013, saying that a robust domestic solar industry in India was critical for global efforts to combat climate change.

Solar energy goals

The two countries held consultations under the WTO last year, but Washington held off on further action as it had hoped that a second phase of India's solar programme would address its concerns.

India has some of the world's most ambitious goals for solar energy, with plans for the world's largest plant at Sambhar in the desert state of Rajasthan. Since 2010, India's solar power capacity has grown from just 17.8MW to more than 2 000, with a target of 20 000MW of grid-connected solar power by 2022.

India has reduced costs by using cheap solar technology, mostly from China. The Indian embassy did not immediately return a message seeking comment on Monday's action.
Read more on:    india  |  us  |  renewable energy

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