India loses WTO case

India has lost its fight at WTO to USA, in a case where it has reserved a portion of its large solar procurement contracts for domestically produced solar cells and modules. Note India is not the first country to put in domestic content requirements for large government tenders. Ontario, China, USA and others have done it in different forms and times. This marks a major escalation in the solar trade wars, as India has been highly accommodative in allowing foreign firms to dominate its domestic solar market. Most Indian solar manufacturers have become sick due to massive low priced competition from Chinese and USA companies, which have swamped the market. India has also not gone ahead with the recommendation of DGAD to impose anti-dumping duties on foreign made solar cells and modules.

Despite this laissez faire policy, the USA government has been going hammers and tongs at the Indians. Note USA also mandates “Made in USA” for its solar procurement. USA also provides massive subsidies and low cost capital for its domestic solar companies such as First Solar, which have benefited to the tune of billions of dollars. Solyndra which is currently bankrupt benefited from huge loan guarantees from the USA government. India is all set to appeal against the ruling. I think India will not be misplaced to put some kind of duties which is allowed by WTO against USA companies. This will level the playing field for Indian companies such as Waaree Energy which have been expanding capacity to meet the demand of India’s 100 GW solar target by 2022.

It is time that the Indian government shows some teeth against US hard politik. The Indian market is too important for other government to play hookey. Some kind of anti-dumping duty would help other governments realize that the Indian government also can fight fire with fire.