The US solar industry has charged India with implementing trade barriers that it says discriminate against US solar energy technology exports.

Testifying recently on Capitol Hill, the Solar Energy Industry Association’s Vice-President of Trade & Compliance, John Smirnow, charged that India’s local content requirement “discriminates against US solar exports and, thereby, provides an unfair competitive advantage to India’s domestic solar manufacturers.”

Smirnow made his comments before the Commerce, Manufacturing, and Trade Subcommittee of the House Energy and Commerce Committee.

India’s solar sector, he said, “is poised for explosive growth, providing an important export opportunity for US solar manufacturers.”

But, he added, that opportunity is thwarted “by India’s continued application of growing use of an industrial policy discriminates against US solar technology exports, thereby providing an unfair competitive advantage to India’s domestic solar manufacturers.”

While local content requirements “may provide some protection for domestic manufacturers, they also stifle innovation, limit a country’s access to next-generation technologies and increase costs, not to mention the fact that local content requirements are explicitly prohibited by global trading rules,” he told the lawmakers.

Over the past few years, US solar panel manufacturers, said Smirnow, “have contracted to supply hundreds of millions of dollars of exports to India. Most of these are panels based on ‘thin film’ technology, a leading-edge US technology with a global competitive advantage, but, at the same time, India’s solar policies have increasingly turned inward.”

India’s National Solar Mission

In 2010, India adopted a local content requirement as part of the country’s National Solar Mission initiative.The US challenge “does not threaten the National Solar Mission itself,” he added. “Not all government-support measures violate global trade rules and there are a variety of measures India could adopt as alternatives to the local content requirement. However, there is no list, whether formal or informal, of WTO-consistent government-support programs which countries could turn to for guidance.”

While local content requirements may provide some protection for domestic manufacturers, he said, those requirements “stifle innovation, limit a country’s access to new technologies, and increase costs – not to mention the fact that local content requirements are explicitly prohibited by global trade rules.”

The US-India solar panel dispute follows on the heels of a recent WTO finding that the Canadian province of Ontario’s local content requirement for solar goods, substantially similar to India’s, violated Canada’s WTO obligations.

In response, “Canada has indicated that the solar program will be brought into compliance with the WTO decision, which we presume means that the country will remove the local content provision,” he said. “India should follow Canada’s lead,” Smirnow said.

Industry and governments “have an important opportunity to work together and proactively develop such a list with the shared objective of expanding solar energy around the world free from the restraints of unfair trade barriers. We believe that collaboration – not litigation – will best serve everyone’s interests.”

Source: globaltrademag.com