India Wins Tit-For-Tat Solar Case Against US At WTO
About a year and a half after the United States secured a favorable ruling at the World Trade Organization against India’s solar power program, India has scored a similar ruling against solar power programs of several US states.
The World Trade Organization (WTO) recently issued its ruling on the dispute number DS510 filed by India against the United States. India had filed a compliant against the United States in response to failed negotiations with the US and the US filing and winning a dispute settlement request with the WTO.
In its ruling, WTO found that as many as 11 state-level incentive and tax credit programs do not conform to the provisions of international trade agreements, specifically the Article III:4 of the GATT 1994. These programs include those active in the states of Washington, California, Montana, Connecticut, Michigan, Delaware, and Minnesota. Programs in these states give preference to American suppliers and equipment manufacturers.
The United States successfully secured a ruling against India’s Domestic Content Requirement provisions in September 2016. India’s National Solar Mission had provisions wherein developers were required to use only Indian-made solar cells and modules for a certain percentage of the capacity auctioned. These provisions were put in place to ensure Indian manufacturers get a share in the large solar power market in the country.
Immediately following the WTO ruling, the Indian government announced plans to file retaliatory charges against similar programs in the United States. India had to cancel some tenders as a result of the ruling but eventually revamped its solar program and has now set aside 12 gigawatts of capacity to be developed using Indian-made equipment.
According to Reuters, the United States told the WTO panel that the ruling shall have little to no impact at all. India’s solar module exports to the United States have been very small compared to its total exports, and the state solar programs challenged by India have either expired or are set to expire in a few years, the United States told the WTO panel.
Still, the ruling is the latest development in the Indo-US trade dispute. Just days before the latest WTO ruling the United States imposed a 25% safeguard duty on Indian solar modules. India exported US$53 million worth of solar modules to the United States in 2018-19. The United States is a large trade partner as far as solar module exports go and bought 44% of the modules exported by India in 2018-19, in value terms.
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