White House criticizes India’s solar industry regulations amid WTO dispute

BY Andy Swab  February 11, 2014 at 6:08 PM EDT
A solar engineer trainer at Barefoot College in Rajasthan, India demonstrates how to build a solar light. The U.S. criticized India for protecting its domestic solar industry at the expense of U.S. manufacturers. Photo by UN Women Gallery.

A solar engineer trainer at Barefoot College in Rajasthan, India demonstrates how to build a solar light. The U.S. criticized India for protecting its domestic solar industry at the expense of U.S. manufacturers. Photo by UN Women Gallery.

The Obama administration criticized India’s solar energy policies Tuesday for discriminating against U.S. exporters and creating challenges for investing in India’s solar infrastructure. The announcement came after Michael Froman, the U.S. trade representative, filed a complaint with the World Trade Organization Monday claiming the solar program doesn’t follow WTO rules.

“These unfair requirements are against WTO rules, and we are standing up today for the rights of American workers and businesses,” Froman said.

India’s massive solar program, called the Jawaharlal Nehru National Solar Mission or National Solar Mission (NSM), calls for Asia’s third largest economy to pump out 20 times as much solar power by 2020. While this is a potential lucrative policy for manufactures to cash in on India’s growing green energy industry, it also requires material for solar panels to be locally made in India. If completed, the solar program would increase solar energy in India from less than one percent of India’s power capacity to five percent in 2022.

Before the solar program started, U.S. exports totaled $119 million. But as local manufacturing requirements were introduced in 2011, U.S. exports decreased, causing concern among the U.S. energy industry.

“We are almost three years in the making of the U.S. trying to get India to move back from this local content requirement,” said John Smirnow, vice president of the Solar Energy Industries Association.

India’s laws risk U.S. companies from realizing $200 million to $300 million in sales as the program ramps up into its second and third stages, Smirnow said.

U.S. and India relations have been strained in recent years. Indian politicians across the political spectrum in New Delhi expressed their outrage last December when Indian diplomat in New York was strip-searched after police arrested her on charges she illegally submitting fraudulent documents to get a visa for her housekeeper and paid her housekeeper far less than the legal minimum wage.

The dispute also comes at a time when the Obama administration hopes to back its pledge for a bipartisan trade promotion authority to boost American manufacturing through exports, as stated in the president’s State of the Union address last month.

In the WTO, the U.S. has created six cases against India since 1996. India is also America’s second-largest export market for solar products after Japan.