India to finally fight back against USA double standards in targeting India’s domestic solar manufacturing promotion policy

We have at numerous times criticized the USA government for targeting India’s domestic content policy to promote solar manufacturing in the country, through a limited capacity in government tenders. The USA government took India’s DCR policy to WTO, where it won and has put India’s fledgling domestic solar manufacturing industry in peril. Note India had/has a great case to impose anti-dumping duties on imports of solar panels, given that other major countries such as China, Europe and USA have already done so against each other. USA was the first country to impose anti-dumping duties on Chinese made solar panels, which it further extended to Taiwan. India did not choose to go through this path as it wanted to promote solar energy generation, which would require cheap imports of solar equipment. It went against its own department DGAD and overruled the imposition of duties against Chinese and USA made solar panels.

Instead it proposed to support the domestic industry by reserving a small capacity in its own tenders, so that these companies could run their factories against the deluge of imports from much larger competitors outside. Note DCR has been used by a number of countries such as Canada and China in the past. Even USA gives massive subsidies to its own domestic manufacturers, through capital grants and cheap loans besides other R&D grants.

The Indian government is finally thinking of exposing USA hypocrisy in this matter by filing a case in WTO against the USA government, for favoring its domestic companies through policies initiated by nine states. We had suggested that the government do this almost a couple of years ago, when USA had filed this case against India. However given the UPA government and its complete bankruptcy, we had known nothing would come out of it. Finally, we seem to have a government with some spine to take on the USA government and exposing its double standards.

The Indian solar companies have been running in an underutilized state for most of the last 4-5 years, with many companies going out of business. It is only in the last couple of years that the Indian companies started churning out some revenues with massive solar capacity demand happening in the domestic market. Many of the companies were running on DCR demand, but now it seems that this source of demand will dry up. Indian companies mostly work on low value add assembly activities and the USA government wants even this to stop. It was a foolhardy decision on the part of the USA administration and I think that it justifiably faces a strong reply from the Indian government.

“It is very unfortunate that the US decided to pursue their case against India in the WTO. All India has done is protect the domestic manufacturers who have so far given 400 MW of equipment to the installed capacity of 6,000 MW,” said Goyal.

He added, “When India scales up to a 100 GW all that the Indian manufacturers can produce is about 15-17,000 MW over the next seven years. This would still leave more than 80,000 MW of market for the world. The US took a very myopic view.”

“Our own domestic manufacturers had won a complaint against US manufacturers for dumping their products in India which would have resulted in high anti-dumping duties. I personally persuaded the Indian manufacturers and it was their magnanimity who withdrew their request. If Indian manufacturers go back to seeking anti-dumping duties, solar power will again become expensive and we may have to abort the programme,” said Goyal.

Source – Hindu