The Obama administration talks a lot about the need to develop renewable energy around the world to curb climate change. But right now, it's trying to kill India's effort to boost its domestic solar industry.
The U.S. wants India to back off a policy that would require local sourcing for solar energy technology, and has sought World Trade Organization enforcement action. Representatives from the two nations reportedly met last week to try to settle the trade battle over India's rapidly developing solar industry, but reached no resolution.
U.S. Trade Representative Michael Froman said in February that India's rules for locally made products for its solar power program "discriminate against U.S. exports" and break WTO rules. "We are determined to stand up for U.S. workers and businesses," he said.
The U.S. and India have 60 days from last month's announcement of the enforcement action -- until April 11 -- to resolve the conflict before it goes to the WTO, which can impose sanctions. Last month, India indicated it would block WTO investigations into its trade policies, according to Reuters.
The dispute centers on the second phase of India's solar power policy, known as the Jawaharlal Nehru National Solar Mission. PV Magazine described the rules in an article in October, noting that they require that half the solar components come from domestic sources.
The U.S. objected to domestic sourcing requirements for the first phase of India's program, leading to WTO consultations in February 2013. Phase II, however, expands domestic sourcing requirements to include thin film solar technologies, which the U.S. exports to India.
Indian and U.S. representatives met last week, according to reports. The countries "are consulting," said a spokesman for the USTR, who spoke on background. "We continue to prefer that our concerns be resolved bilaterally, but after we filed last year's WTO solar dispute, India maintained and expanded the local content requirements in its national solar policy rather than seek to resolve U.S. concerns."
Some environmental advocates have criticized U.S. representatives for challenging a policy meant to help develop India's renewable energy. They argue that the WTO action contradicts work by the U.S. and other nations through the United Nations to reach international agreements on cutting emissions and supporting the transition to a low-carbon economy in developing countries like India.
Right now, India is "incredibly reliant on coal," said Ilana Solomon, director of the Sierra Club's Responsible Trade Program. "It is imperative for the people of India and our global climate that India begins to transition away from fossil fuels like coal and to renewable energy sources like solar.
"We do believe that U.S. has a right to, and should be, fostering its own manufacturing," said Solomon. "But that doesn't mean that the U.S. should be trying to tear down the capacity of other countries to do the same."
The USTR spokesman argued that the effort to change India's policy would benefit the shift to renewable energy. "The U.S. request for consultations supports the goal of rapid global deployment of renewable energy," said the spokesman. "Local content rules 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."
