The United States on Monday requested World Trade Organization dispute settlement consultations with India concerning domestic content requirements in Phase II of India’s National Solar Mission.
The U.S. government said these domestic content requirements “discriminate against U.S. solar cells and modules by requiring solar power developers participating in Phase II to use Indian-manufactured solar cells and modules instead of U.S. or other imported equipment.”
In addition, India has extended the domestic content requirements to more solar energy products than covered under the first phase of its National Solar Mission.
“These domestic content requirements discriminate against U.S. exports by requiring solar power developers to use Indian-manufactured equipment instead of U.S. equipment. These unfair requirements are against WTO rules, and we are standing up today for the rights of American workers and businesses,” said U.S. Trade Representative Michael Froman in a statement.
“We also take this action in support of the rapid global deployment of renewable energy,” he added. “These types of ‘localization’ measures not only are an unfair barrier to U.S. exports, but also raise the cost of solar energy, hindering deployment of solar energy around the world, including in India.”
In October, India’s cabinet approved measures governing the implementation of Phase II of the NSM. For solar projects under Phase II, India is again imposing domestic content requirements, under which solar power developers must use Indian-manufactured solar cells and modules instead of U.S. or other imported equipment. Moreover, the Phase II domestic content requirements have been expanded to cover thin film technology, which was exempt from such requirements under Phase I. As thin film currently comprises the majority of U.S. solar product exports to India, these domestic content requirements are likely to cause even greater harm to U.S. producers than under Phase I.
A request for consultations is the first step in the WTO dispute settlement process, and consultations are intended to help parties find a solution. Under WTO rules, if the matter is not resolved through consultations within 60 days of the request, the United States may ask the WTO to establish a dispute settlement panel.