A Loss for India again at WTO

In another round with USA, India lost its case with the WTO, wherein the latter had appealed against USA’s complaint over the Indian domestic content requirement (DCR) provisions. It is imperative for the world to realize the fact that India needs to cut down its thermal generations, to sustain green energy promotions. From the latest list of top module suppliers in India, it is evident that the Chinese have occupied a major chunk of the Indian market, due to its cheap products. The Indian module suppliers hardly cater to ~10% of the total marketshare in India.

USA Trade Representative Froman said, “Local content requirements are not only contrary to WTO rules, but actually undermine our efforts to promote clean energy by requiring the use of more expensive and less efficient equipment.”

Source: Scroll

India has chalked an aggressive target of achieving 100 GW of solar installations by 2022. It is important for the country to generate interest amongst the masses to attain this massive number. Until and unless there is domestic employment generation, it will be difficult for the country to do so.

According to the original petition, India wanted to reserve a portion of its large solar procurement contracts for domestically produced solar cells and modules. However this was challenged by USA on the grounds that DCR provision is against global WTO rules, which advocates free international trade between countries. It is to be noted that even India is entitled to impose anti-dumping duties on imports to protect its local manufacturers, but it has not done it so far to promote solar energy generation. However USA is after India and is missing the important point that the world needs to support big emerging economies like India, to curb their fossil fuel generations.

India has become an important market for solar energy, with major solar companies setting up base in India and supplying here. The country had reserved only a small portion to be supplied locally. The prices of solar modules are already going down, and I think the only way left for India to hit back is by imposing an anti-dumping duty on imports. However it is only going to hamper the solar progress in the country, making the solar products dearer. I have already mentioned in my earlier post, that it makes little sense for USA to fight against India as China will be the biggest beneficiary of its action, but it is still carrying on.

It took India a couple of years to hit back at the US government. It will be interesting to see what the government will do next.