India, US seek to settle solar power trade dispute

With the India-US relations moving onto a higher trajectory, the US and India are in talks to settle a long-standing solar power trade dispute. This has delayed the announcement of a ruling by the World Trade Organisation (WTO), an Obama administration official said on February 5.

The US had filed the WTO challenge three years ago, where it had claimed that India’s national solar power programme illegally discriminated against imported solar panels and related products through its domestic content requirements.

Refusing to confirm any details about the WTO’s intentions, US Trade Representative spokesman Andrew Bates said that the talks were aimed at reaching an out-of-court resolution before any public announcement. The Geneva-based trade body had already postponed the hearing on the issue.

“The United States initiated this dispute for the purpose of advancing the rapid deployment of clean, affordable energy in India and around the world,” Mr Bates said. “India has now asked to speak with the United States regarding the issue, and in light of ongoing discussions, the release of the WTO panel’s report ruling has temporarily been delayed,” Mr Bates added.

In 2013, the US had alleged that the Jawaharlal Nehru National Solar Mission subsidies were available only if developers used equipment produced in India. This was a violation of a key global trade rule. The programme is aimed at easing chronic energy shortages in India which is also Asia’s third-largest economy.

Arguing that the rules are a barrier to solar products made in America and elsewhere, the Obama administration said that it would also effectively raise the cost of generating solar power in India and would increase the country’s dependence on fossil fuels.

In 2015, a WTO panel had given a ruling against India over its solar power programme. The ruling said the government did not offer a level playing field to both foreign and domestic manufacturers of solar panels. India had appealed against the ruling. India has also been charged by the US of violating provisions in the Trade Related Investment Measures (TRIMS) through the provision of imposing local content requirements that discriminate against foreign products.

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