India is getting ready to respond firmly to the U.S allegations that the domestic content requirements in phase II of JNNSM will likely cause greater harm to the U.S producers.
India has accused the U.S for adopting double standards over the issue as it feels the U.S itself is providing export credits to its solar products like thin film panels and preferential treatment for power purchase from indigenous producers in 13 of its states.
The commerce department is examining the evidence of 13 US states which follow equally restrictive policies on solar power.
India has maintained that JNNSM was fully WTO compliant, and the country expressed grave concerns over importing thin-film technology for solar panels ‘overwhelmingly’ from countries like the U.S.
Earlier this month Mike Froman, the U.S trade representative, stated the country is approaching WTO challenging India’s domestic content requirement policy in JNNSM phase II. U.S alleges that in phase II of JNNSM, the domestic content requirement was expanded to cover thin film technology whereas it was exempt from such requirements in phase I.
However, an official from the Ministry of External Affairs, said, “One or two of the major US producers of thin films have got export credits from the US government which is encouraging an inflow of older technology into India. Moreover, the cost of products sourced from the U.S and China are suspiciously lower than the known production cost,”
The U.S is offering similar schemes to its own states, according to the official at the Ministry. There are over a dozen states in the US that have schemes in place to offer preference to purchase of power produced by US-made solar products. “It is India that has a case to file against the US in the WTO on solar energy products instead of the other way round,” the official added.
One of the reasons for restrictions on thin film panels made from cadmium telluride is that they are environmentally damaging and hence, banned in a few countries and is not even a preferred choice worldwide. They are known to be less efficient than crystalline technology.
Industry estimates say the heavy imports from the U.S have caused the thin film usage in India to shoot up to over 55 percent of the total installed PV capacity, against 10 percent globally. These imports have largely benefitted U.S firms.
Further India has not signed the government procurement agreement of the WTO. In India, there is no local sourcing requirement for any power purchased by the state government, according to Ministry sources.
The Department of Commerce is preparing the reply. The countries have been given 60 days to resolve the matter, failing which the U.S could request to establish a WTO dispute settlement panel.