India lodges complaint to WTO against US on renewable energy

India has accused the United States of favouring its domestic solar industry through subsidies.

Updated on: Sep 15, 2016, 10:39:42 IST

Hindustan Times | By Chetan Chauhan, New Delhi

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India has lodged a complaint against the United States with the World Trade Organization (WTO) accusing it of favouring its domestic solar industry through subsidies, three years after the US got a similar subsidy stuck off from the national solar program.

India has accused the United States of favouring its domestic solar industry through subsidies (PTI File Photo)

This is the first complaint against the US’ domestic clean energy policies and officials in New Delhi say more would be filed to expose subsidies that hinder “fair” competition in violation of WTO rules prohibiting such largesse.

The TRIMs Agreement under WTO calls for treatment of imported products “no less favourable” than the ones produced domestically in terms of trade and distribution.

The commerce ministry in the complaint said that incentives provided to solar companies in eight American states - Washington, California, Montana, Massachusetts, Connecticut, Michigan, Delaware and Minnesota - were in violation of national treatment and other provisions of the WTO.

The California solar incentive program prescribes manufacturing of photovoltaic modules and solar power equipment within the limits of the City of Los Angeles. Other states have replicated the California module to boost domestic solar industry which was hit by cheaper solar photovoltaic from China.

India said sellable renewable energy credits was being offered to companies for each megawatt hour of power generated provides the equipment used in manufactured in these states. In addition, the workforce should be a resident of these states.

“This distorts the level playing field for companies,” a senior government official said, explaining that most Indian companies will not be eligible to compete in these states.

As a first step, the US will have to respond to the complaint filed on September 9 within 30 days and after that India can call for an establishment of a dispute settlement plan if the two sides fail to amicably resolve the issue.

The complaint is, however, a tit-for-tat action from India after the US complained against 33% domestic content requirement in the solar photovoltaic projects funded under the Jawaharlal Nehru National Solar Mission.

In 2013, a settlement panel of WTO ruled in favour of the US terming the requirement a violation of norms for fair trade. The programme provides a guaranteed rate of return for a period of 25 years through a tariff fixed through auction.

The solar tariff has fallen below Rs 4 per unit in the latest auctions, probably among the lowest in the world.

The low tariff provides India with a business opportunity in the global market as it can provide cheaper solar energy while giving a push to domestic manufacturers through domestic content requirement.

“We can be global players in the solar market if we have a strong domestic market and for that, we need a favourable WTO ruling,” an official, who was not willing to be quoted, said.

ABOUT THE AUTHOR
Chetan Chauhan
Chetan Chauhan is the National Affairs Editor looking into all aspects of news and features from across India. A Chevening scholar with over three decades of experience in reporting and news management, Chetan has extensively covered all important aspects of the social sector, political economy, environment and climate change nationally and internationally. He did a journalism course at the Reuters Institute of Journalism in Oxford and Digital Media training at Nanyang Technological University in Singapore. He started as a reporter with The Statesman in 1996 and joined the Hindustan Times in 2000 in the metro bureau covering environment, crime and Delhi politics. He covered hot local news, from the Jessica Lal murder case to the rebellion of Delhi Congress MLAs against then Chief Minister Sheila Dikshit, to the replacement of toxic vehicle fuel with cleaner compressed natural gas (CNG) in the national capital. Some of his stories on air pollution became part of the Supreme Court’s landmark MC Mehta versus Government of India case in the National Capital Region (NCR), forcing the government to take corrective measures. As part of the national political bureau since 2004, he covered important central sectors such as environment, education, social justice, labour, rural development, water resources, renewable energy, agriculture, broadcasting and the Planning Commission for more than a decade producing several exclusive and investigative breaking stories. His specialisation is the environment, having covered at least a dozen United Nations global conferences on climate change, biodiversity and wildlife including climate summits in Paris, Copenhagen and Bali. He also covered India’s two five-year plans ---11th and 12th and reported on drafting and execution of right based laws such as Right to Education, Right to Information and rural job guarantee law, MG-NREGA, now being introduced in new format as VG-RAM-G Act. He has in-depth knowledge of social sector issues. He was one of the first to report on tigers vanishing from Sariska and Panna wildlife reserves in 2004 and 2008, respectively, leading to the setting up of the National Tiger Conservation Authority (NTCA) and the introduction of stringent penal provisions for poaching. He has written extensively on the rising human-animal conflict in India and the degradation of India’s biodiversity hotspots because of mining and other activities. Since 2004, Chetan has covered Parliament comprehensively and participated in training on the nuanced coverage of Parliament proceedings. He has travelled extensively across India to cover national and provincial elections since 1998, especially in the Hindi heartland states, considered India’s road to power. He writes a regular column for Hindustan Times, Ecostani, on important national politics, economy, Himalayan ecology and environmental issues. His other responsibilities include providing inputs for edits and edit page articles for the publication, apart from managing news flow from across India.Read More

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