India-US solar dispute heats up

Indian PV manufacturers have ratcheted up their call for anti-dumping duties on US solar equipment ahead of a key decision from Delhi, injecting fresh intensity into the ever-more-knotted solar dispute between the two countries.

The call comes three weeks before Delhi is meant to rule on whether such anti-dumping duties are appropriate. Indian solar manufacturers filed the request more than a year and a half ago.

The Indian Solar Manufacturers’ Association (ISMA) lobbying group, whose members include domestic heavy-hitters like Tata Power Solar, Indosolar and Moser Baer, this week claimed that imports of cells and modules are costing India’s local PV industry 10bn rupees ($166m) per year.

In addition to the near- and long-term damage being done to India’s incipient PV manufacturing sector, the country’s heavy reliance on foreign equipment also endangers its broader solar roll-out by exposing it to the wildly fluctuating rupee, the group argues.

Moser Baer chief marketing officer Vivek Chaturvedi told the local media that his company would “welcome” foreign PV manufacturers building factories in India, as doing so would create “a level playing field for all of us”.

Specific to the US, the ISMA believes anti-dumping duties of 30-35% should be imposed to level the playing field.

India already reserved 50% of the capacity awarded in the most recent National Solar Mission tender round for developers using locally sourced cells and modules. Anti-dumping duties would be critical as they would apply to the many projects being built under statewide programmes in India outside the National Solar Mission.

Earlier this month, US developer SunEdison was reported to have walked away from a 20MW project in India, claiming the country’s domestic content requirements rendered it uneconomic because it could not source enough high-quality modules locally quickly enough.

The ISMA disputes the claim that India-made cells and modules are not up to snuff, saying that 70% of local capacity is sitting idle for a lack of orders.

Delhi finds itself in an uncomfortable place as the late May deadline for its anti-dumping decision nears.

While keen to support Indian manufacturers, the government is also concerned that taking further protectionist steps could threaten the viability of the National Solar Mission – not to mention further raising the ire of the US.

India is also investigating the possibility of anti-dumping measures against China, Taiwan and other Asian countries.

Delhi’s upcoming decision, meanwhile, is playing out against the unfolding dispute brought by the US at the World Trade Organization against the National Solar Mission’s domestic content requirements.

The US initiated a fresh WTO complaint after India closed the thin-film loophole in the latest National Solar Mission tender rounds – a loophole that had benefited First Solar.

Earlier this week India rejected a move by the US that would have set up a WTO dispute panel on the issue, saying that it would prefer to continue discussions on a bilateral basis.

If the US makes a second request for a dispute panel – as it is expected to do – then India would be compelled to the table.

Underscoring the complexity of the issue, a range of high-profile US environmental groups, including Greenpeace and the Sierra Club, oppose the US case in the WTO, saying that it puts the interests of US companies above India’s environmental challenges.