The Wall Street Journal: U.S. Files Complaint on India Solar Plans

The Wall Street Journal: U.S. Files Complaint on India Solar Plans

Feb. 10, 2014 4:54 p.m. ET


The U.S. on Monday filed a World Trade Organization case against India over a solar-power dispute that has limited U.S. access to the Indian market, a move that could further inflame relations between the two countries.

U.S. Trade Representative Michael Froman said a major government program in India to expand its solar-generation capacity discriminates against American suppliers.

The WTO case follows a complaint the U.S. lodged at the trade body last year against the initial phase of the Indian program. Negotiations to settle that complaint have failed to progress.

Both cases could move to WTO adjudication if the U.S. and India can’t reach an agreement.

“This is something we’ve been asking for a while now,” said John Smirnow, vice president of the Solar Energy Industries Association. Mr. Smirnow estimates India’s rules put $200 million to $300 million in U.S. exports at risk. That is significant but less than the billions of dollars involved in solar trade disputes with China, he said.

U.S. officials said solar-energy sales in India are expected to grow rapidly in coming years. Phase 2 of India’s solar building program is expected to add 750 megawatts out of a total 20,000 megawatts for the entire program, and U.S. solar producers want to make sure they can participate as the program expands.

A spokesman for the Indian Embassy in Washington didn’t reply to a request to comment on the solar case.

Indian officials have argued that Washington has also supported protectionist policies and that U.S. officials make unreasonable demands on India’s economy.

In recent months, ahead of Secretary of State John Kerry’s trip to India, the U.S. business community has complained in Washington over intellectual-property issues, especially over drugs.

The solar spat comes at a time of friction between the two countries, including a recent disagreement over the treatment of diplomats. Federal prosecutors in January filed a criminal indictment against an Indian consular official, accusing her of visa fraud and making false statements about a domestic worker.

Indian police removed barriers in front of the U.S. Embassy in New Delhi in apparent retaliation. The diplomat, Devyani Khobragade, denied the charges and has left the U.S.

In the WTO, the U.S. has opened half a dozen cases against India since 1996, according to the WTO’s website, mostly related to agriculture. China is a more frequent target of U.S. officials, with 15 cases brought since 2004.

India’s imports of oil, gas and coal have ballooned in recent years, contributing to a chronic trade deficit that has shaken international confidence in its future. To reduce that import dependence and become greener, in 2010 India launched the Jawaharlal Nehru National Solar Mission, a bid to raise solar-generating capacity to 20,000 megwatts by 2022. That would bring solar to about 5% of its power mix from less than 1% today, according to government projections. It also has proposed boosting its nuclear-power capacity and domestic production of fossil fuels.

Since the launch of the solar mission, the country’s capacity has risen to roughly 2,000 megawatts from just 18, according to government figures.