The following article is based on my own interpretation of the said events. Any material borrowed from published and unpublished sources has been appropriately referenced. I will bear the sole responsibility for anything that is found to have been copied or misappropriated or misrepresented in the following post.
Vinay Yadav, MBA 2015-17, Vinod Gupta School of Management, IIT Kharagpur
Stung by the February 2016 judgement of the World Trade Organization (WTO) that India’s rules over use of domestically manufactured solar power equipment violate international trade rules, the government of India is planning to file counter cases against the US.
India’s Minister for New and Renewable Energy has announced intent to file as many as 16 cases against the US for mandating project developers to use domestically manufactured solar power equipment. The Indian government will reportedly be targeting policies followed by some US states.
India’s intention to promote Indian manufacturing of solar power equipment hit a roadblock after the WTO ruled, for a second time, in February against the government’s policy to mandate the use of India-made solar power equipment for a set amount of capacity offered in the auctions.
While the Indian government significantly reduced the share of capacity that would use Indian modules, the US seems unsatisfied. During the first Domestic Content Requirement (DCR) auction under the National Solar Mission, as much as 50% of the offered capacity was reserved under said provisions. That percentage has dropped considerably in subsequent auctions.
When the current government took office it refused to levy anti-dumping duties on imported modules despite repeated pleas from the domestic manufacturers.
The Indian government reportedly also offered a compromise ahead of the February judgement. According to media reports, the government stated that that DCR projects shall be restricted to only government-owned companies and entities, like NTPC Limited, Coal India Limited, Indian Railways, and the Indian Defence Forces.
With no compromise achieved, the Indian government is now looking to up the ante with counter complaints at the WTO.