Indian solar industry divided on US’ WTO complaint

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wto solar industryTuesday, February 18, 2014: The recent case by the US government in WTO against the Jawaharlal Nehru National Solar Mission (JNNSM) has created much furore among the Indian solar industry. The solar cell manufacturers have reportedly given their consent to government’s decision to back the industry, but the power project developers have voiced their support for the foreign cells makers.

The developers cite the decreasing cost of solar power as the main reason to import cheap cells. “The case is not justified as this is a government procurement programme and WTO guidelines don’t cover that. Apart from that, more than 80 per cent of the projected demand is there for imported content,” said Ajay Goel, the chief executive officer of Tata Power Solar, in an ET report.

The US government filed a case in the World Trade Organisation for the second time against JNNSM, on last Monday. US argued that the mission underlines compulsion for the power developers to use locally (Indian) made equipments.

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“US is pushing its agenda to protect its domestic industry. Government of India is doing the same and is absolutely right in doing so. We do not think it will have any impact whatsoever,” said Vivek Chaturvedi, chief marketing officer, Moser Baer in the same report. The domestic content requirements restrict entitlement in the JNNSM Phase 2 creating a 50 per cent restriction of the specific demand that was originally intended from this programme.

The issue began as US filed a case in 2012 against the domestic content requirement guidelines of the first phase of the National Solar Mission. According to the guidelines, solar power project developers are to source 30 per cent of the required equipment from domestic manufacturers. After the US and some Indian project developers unsupported, the government of India gave equal projects under the second phase for development from domestic and foreign content.

Despite the open category at their disposal, the US solar industry and government have alleged that it will hurt their export market. “The domestic content requirements restrict our entitlement and in the specific example of the JNNSM- Phase 2 this creates a 50 per cent restriction of the specific demand that was originally intended from this programme,” said spokesperson of First Solar, US major manufacturer of solar cells and the exporter to India.

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