The Office of the United States Trade Representative (USTR) filed a complaint against India to the World Trade Organization (WTO) over the country’s domestic content requirements for solar systems. The complaint is about Phase II of India’s National Solar Mission (NSM), which requires Indian power developers to use Indian-manufactured solar equipment as opposed to equipment from other countries, including the U.S. The country previously had a domestic content requirement but in Phase II even thin-film photovoltaics, like those made by First Solar, are excluded from the program.
India launched the NSM in 2010. Under the first phase solar developers were required to use certain solar cells and modules manufactured in India, according to USTR. However, the rules didn’t apply to thin film PV. Last February the U.S. requested WTO consultations with India with respect to these domestic content requirements, however, those consultations didn’t resolve with the U.S.
“These domestic content requirements discriminate against U.S. exports by requiring solar power developers to use Indian-manufactured equipment instead of U.S. equipment,” said U.S. trade Representative Michael Froman. “These unfair requirements are against WTO rules, and we are standing up today for the rights of American workers and businesses. We also take this action in support of the rapid global deployment of renewable energy. These types of ‘localization’ measures not only are an unfair barrier to U.S. exports, but also raise the cost of solar energy, hindering deployment of solar energy around the world, including in India.”
Under the prior phase of India’s NSM, India still required that most PV used in solar arrays have domestic content, but thin-film PV like that made First Solar was exempt. “As thin film currently comprises the majority of U.S. solar product exports to India, these domestic content requirements are likely to cause even greater harm to U.S. producers than under Phase I,” the office said.
The Solar Energy Industries Association (SEIA) agreed with the filing calling it justified and necessary. “We strongly support today’s decision by U.S. Trade Representative Michael Froman to move forward with a WTO case against India’s solar local content requirement,” said SEIA President Rhine Resch. “Localization barriers are a growing threat to U.S. solar exports and clearly violate WTO rules.”
“Over the past three years, the U.S. government has provided India every opportunity to remove restrictive and unfair marketplace requirements,” Resch stated. “In the absence of any meaningful effort by India to find common ground, it’s now time for the WTO to finally resolve these long-festering issues.”