The US on Monday announced that it was going to the World Trade Organisation seeking consultations on India’s “domestic content requirement” for solar panels.
This has been an ongoing bilateral trade issue, with the US first taking India to WTO last February. The rules have changed, but evidently not enough to appease the US.
"These unfair requirements are against WTO rules, and we are standing up today for the rights of American workers and businesses," US Trade Rep­resentative Mike Froman said.
Under the “domestic content requirement” rule, India expects foreign suppliers to use specified locally sourced components such as cells and thin-films.
“Consultation” is the first stage in WTO’s dispute settlement process that lets countries resolve issues bilaterally within 60 days. Failure can lead to adjudication by a panel.
India and the US have had 14 past or ongoing WTO disputes.
US officials insisted that the timing of the current action had nothing to do with the recent Khobragade issue.
These things happen in a “mature” trade relationship, an official said.
Monday’s action, however, could be just the first this time.
US businesses have in recent days brought on unprecedented pressure on their government and lawmakers to force India to yield on trade issues that they find discriminatory. Their main grouse is India’s patent regime.
US exports of solar panels to India in 2011 were worth $119 million out of a total bilateral trade of $67.3 billion a year.
What is more of a worry is where the market is headed: the Indian solar power generation industry is seen to grow 20-fold.