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China to be the biggest beneficiary of USA foolishness in filing a WTO solar case against India

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USA has doggedly fought a case against India solar procurement rules for the last one year and won the case in WTO. We have repeatedly highlighted the stupidity of the USA government in pursuing this case which will hardly benefit any major USA producers such as Sunpower or others. The Indian government did not impose anti-dumping duties on imports of solar cells and panels last year, which are allowed under WTO rules. They had made this decision, as they did not want to hamper the growth of the solar electricity generation market. Instead to help the local domestic manufacturers, the government had mandated that subsidized procurement would reserve some percentage for local producers of solar products. Even this was found objectionable by USA and it started a WTO case. Note USA has a domestic procurement preference under ARRA and also had imposed ADD and CVD on Chinese and Taiwanese solar panels and cells.

China has almost captured 70% of the Indian solar market due to its low costs and aggressive pricing in the Indian market. Indian solar panel prices is one of the lowest in the world, with prices ranging from 40-50 cents/watt. This is due to low transportation costs from China to India and intense competition. Most USA solar producers such as Sunpower are not able to compete in this market. First Solar is also struggling to win back it lost market share. By forcing India to dilute its rules for domestic preference, USA will benefit China as USA producers have little hope in winning the market. India will lose support for solar energy generation, if jobs are not created locally. It is imperative for the world that India reduces its thermal power dependence going forward and use more solar energy. Currently most Indian solar producers are in a distressed state, as they cannot compete with the scale and costs of large Chinese players. By not allowing Indian manufacturers to grow, USA is giving a strategic advantage to the Chinese companies. Even the big USA NGOs and environmental organization such as Greenpeace have supported the Indian stand. However, USA refuses to realize its stupidity.

Hindu

India hopes to reach a mutual understanding with the US on the contentious issue of domestic sourcing conditions in New Delhi’s solar energy programme by February 24, when the third extension given by the World Trade Organisation (WTO) to both to settle the matter expires.

Failing a settlement or another extension request by the US, which is the aggrieved party, the WTO may publicise a dispute panel’s ruling on the matter which favoured Washington. However, if no extension is given New Delhi has the option of going in for appeal.

US Trade Representative Michael Froman had told the media last week that the two countries were still engaged in conversations. “It’s too early to tell whether we’re going to have an agreement or not,” he said.

PG

Sneha Shah

I am Sneha, the Editor-in-chief for the Blog. We would be glad to receive suggestions, inputs & comments on GWI from you guys to keep it going! You can contact me for consultancy/trade inquires by writing an email to greensneha@yahoo.in

One Response so far | Have Your Say!

  1. Arun Kumar

    Yes you are right. Our dreams of having 100 GW of commissioned capacity may not be a reality by 2022 with cheap imports ,not looking at quality and safety issue . We may have on paper a 100 GW of installed capacity but the real commissioned capacity is a matter of concern.