The US has launched a trade complaint against India over its national solar programme, highlighting renewable energy’s place as the new battleground in global trade.
The case announced on Wednesday is the latest sign of rising trade tensions between the US and India. The two countries have in the past year filed a series of trade cases against each other before the World Trade Organisation.
But it also highlights the role of renewable energy – and particularly the solar industry – as an increasingly frequent target for trade cases aimed at the high levels of government support the sector attracts.
China last December challenged the European Union over solar power generation programmes in Italy and Greece, and has itself been on the receiving end of disputes from the EU and the US over its solar energy policies.
“The US strongly supports the rapid deployment of solar energy around the world, including with India,” Ron Kirk, the US trade representative, said in a statement on Wednesday. “Unfortunately, India’s discriminatory policies in its national solar programme detract from that successful co-operation, raise the cost of clean energy, and undermine progress towards our shared objective.”
The US is specifically challenging India’s national solar policy, which was launched in January 2010, requiring developers of solar projects to use modules and cells manufactured in India.
The US said India was also proposing to expand these domestic content standards to solar thin film technologies, which comprises the bulk of US exports to India. It noted that energy developers participating in India’s national programme benefited from guaranteed purchases from the government, to the detriment of foreign competitors.
The US said these policies were inconsistent with global trade rules, and had been raised with Indian officials in recent years to no avail. On Wednesday, the US lodged a “request for consultations” with India at the WTO, the first step in a trade dispute.
India has been introducing some local content law and is implementing it piecemeal – with the most outspoken US business complaints focusing on telecoms and technology products.
The Obama administration last year launched its only other WTO case against India, challenging the South Asian nation’s poultry ban. Meanwhile, India lodged its own trade dispute against the US over duties imposed on its steel products.
The administration’s increasingly aggressive stance against India has support in Congress, where US lawmakers welcomed the latest US case against India on Wednesday.
“Unfortunately, India’s policies are part of a broader trend that is putting US jobs at risk, inhibiting investment, and undermining our ability to sell American goods in other countries,” said Dave Camp, the Republican chairman of the House ways and means committee. “America must defend our trading rights.