India loses WTO appeal in US solar power dispute

India loses WTO appeal in US solar power dispute

Security personnel patrol the premises of a newly inaugurated solar farm in Gunthawada village in Banaskantha district of Gujarat October 14, 2011. REUTERS/Amit Dave/Files

India on Friday lost its appeal at the World Trade Organization (WTO) in a solar dispute, failing to overturn a U.S. complaint that New Delhi discriminated against importers of India’s solar power sector. WTO appeals judges upheld an earlier ruling that India had violated WTO rules by requiring solar developers to use Indian-made cells and modules. The appeals decision is final and India will have to bring its laws into line with WTO rules. “This report is a clear victory for American solar manufacturers and workers, and another step forward in the fight against climate change,” U.S. Trade Representative Michael Froman said in a statement. Indian officials had no immediate comment on the outcome of the appeal. U.S. solar exports to India have fallen more than 90% since India implemented the rules, the statement said. As in the previous ruling, which was issued in February this year, the judges said India could not seek an exemption on the grounds that its domestic solar sector was included in government procurement, nor on the grounds that solar products were in short supply. Nor was there any justification on the grounds of ensuring environmentally sustainable growth or combating climate change. The dispute, launched by the United States in February 2013, concerned an increasingly common target of trade disputes – solar power, with an increasingly common complaint – local content requirements. The appellate ruling came just days after India filed a complaint with the WTO against subsidies provided to the solar industry in eight US states. Under WTO rules, countries are not allowed to discriminate against imports and favor local producers, but over the past five years, countries eager to support their own manufacturers have frequently used local content requirements, while closely monitoring their use by others. “We strongly support the rapid deployment of solar power around the world, including in India,” Froman said. “But local content requirements not only violate WTO rules, they actually undermine our efforts to promote clean energy by requiring the use of more expensive and less efficient equipment, making it harder for clean energy sources to compete.”