India warns US of dumping probe in solar panel dispute

Are India and the US headed for a face-off at the multi-lateral body, World Trade Organisation? Seems so, as the on-going dispute between the two on rules guiding India’s solar power generation programme have got more bitter.

New Delhi has warned Washington that it may initiate anti-dumping investigation against solar panels imported from America if it does not withdraw its complaint against India’s compulsory domestic sourcing rules for solar power generation at the WTO.

India had been dragged to the WTO by the US for mandating that a small fraction (about 8,000 MW of a total of 1,00,000 MW its solar projects) be created with domestic modules. It says that the clause goes against the WTO rule of ‘national treatment’.

WTO report soon

New Delhi’s warning, however, may have come a bit too late, as the WTO panel looking at the dispute will be ready with its report next month, and it may not be “proper” to withdraw the report at this stage, those associated with the talks told BusinessLine.

“If the US withdraws its complaint now, it would be obvious to everyone that a deal has been struck with India outside the WTO. This is not considered proper,” a senior Government official said.

The reasons cited for India’s late reaction is the key players in the domestic solar power generation programme — the power generation companies and the producers of solar panels and modules — have been pushing the government in different directions.

Another official said if the US does not withdraw its complaint, India could initiate anti-dumping investigations against America-based exporters of solar power generation equipment once again.

India is under pressure from domestic manufacturers for action against cheap imports has been rising.

Cheap panels, modules

While the solar panel manufacturers want the government to impose anti-dumping duties (penal duties imposed when exporter sells goods in foreign markets at prices lower than what it charges in domestic market) against cheap panels and modules flowing in from the US and China, the generating companies want imports of the cheap inputs to be encouraged.

If the WTO rules in favour of the US and India is forced to remove the domestic content requirement norm, it may then have to seriously re-examine the option of imposing anti-dumping duties to protect domestic solar panel producers, the official added.



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