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India to move WTO against US over renewable energy

According to reports, after US, now it is India that is contemplating moving World Trade Organization’s (WTO) dispute settlement body on renewable energy.

India has alleged that the US is offering such renewable energy sector subsidy programmes for local content requirements which is making the entry of Indian companies difficult and are in violation of global trading rules.

In the report that has been filed to WTO’s Subsidies and Countervailing Measures Committee on April 18, India has named the four states of Connecticut, Delaware, Massachusetts and Minnesota specifically where such a programme is on to promote local firms there.

Thus, India has sought an explanation from the US government. India has said that it is “concerned” over such type of subsidy programmes because they are in complete violation of the TRIMS (Trade Related Investment Measures) Agreement of the WTO.

Some of the leading Indian solar photovoltaic (PV) module manufacturers such as Tata Power Solar and Moser Baer have told Business Standard about the difficulties in penetrating the US market due to the support given to its domestic manufacturers.

Ajay Goel, chief executive officer (CEO), Tata Power Solar said that the US government offers a variety of incentives to its companies to protect them from foreign firms. “Preferential treatment is given to US manufacturers, due to which we have not been able to make much inroads there. We have a bunch of investments which are on hold because of this.”

Another leading Indian firm Moser Baer had to quit US as it found the country to be “unviable” for doing business because of “several fiscal incentives given especially by US’ Department of Defense to the locally made solar panels”. But it did not face any problem in Europe and Japan.

“Over a period of time we realized that many states in the US are promoting schemes providing fiscal or other benefits with respect to the renewable energy products linked to the use of their local content. By giving varied incentives for use of their local content, a large number of the states in the US, made it unviable for us to do business there,” Deepak Puri of Moser Baer highlighted.

India, in its report, has also asked US to furnish details to provide details “as to which of the state or regional or local level renewable energy programs provide subsidies including incentives or additional incentives or rebates or credits, contingent upon compliance of domestic content requirements such as equipment manufactured or principally manufactured in certain parts of the state or specific%age of manufacturing or assembling to be done in a particular region or manufacturing to be done by companies having significant presence in a particular region or using domestic feedstock, etc.”

India has also sought clarification from the US government on the various state and regional level renewable energy programmes that provides incentives in the forms of rebates and credit to domestic solar equipment makers.

Earlier this year in February US had moved WTO against India on similar grounds. It had said in its complaint that the Indian government is offering subsidies to its local companies for solar cells and solar modules under the Jawaharlal Nehru National Solar Mission, which is hampering American companies. Now, Japan and Australia have also joined the consultation.

One comment

  1. Good that INDIA is now learning the COUNTRY FIRST concept at the cost of Rs. 1 lakh crore or more tax loss through renewable energy generation in the form of Accelerated Depreciation, Capital Subsidy or Viable Gap Funding or such incentives from the State governments in addition to MNRE.

    Can INDIAN Government publish a document that what kind of Tax loss or revenue loss have occured for the 12% renewable energy through private participation (instead of Government directly doing the same and transferring the Common Man’s assets to these Private companies, yet many Biomass plants are not functioning!!) and also as to which of the state or regional or local level renewable energy programs provide subsidies including incentives or additional incentives or rebates or credits, contingent upon compliance of domestic content requirements such as equipment manufactured or principally manufactured in certain parts of the state or specific%age of manufacturing or assembling to be done in a particular region or manufacturing to be done by companies having significant presence in a particular region or using domestic feedstock, etc.” These details (each state wise) must be made available on MNRE web site and also on each REDL websites for the sake of transparency and also to play a level playing field through ONE NATION CONCEPT.

    Let us compare as to how a rich nation and a poor nation can afford such loss of revenue or exchequer compared to GDP sum….. You will find that INDIA did and is doing a foolish thing through Capital Subsidy, Accelerated Depreciation and now the much anticipated Viable Gap Funding, without any increase in GDP due to manufacturing as 70% of the raw material is imported, thus, Domestic Content Requirement Clause will not help INDIA till we create in house raw material production with good quality at low costs with uniform taxation throughout the nation without any SEZ or non SEZ stupidity….. in a radius of 40 to 100 km km of a metro, we have SEZ and due to incentives, the companies located in non SEZ area are losing out business due to price difference of 20% without any technical excellence, but, due to this FISCAL stupidity called TAXATION or tax rebates for having located the Industry in SEZ area, that too by destroying the Fertile land, which will again create food security issues 20 years down the lane for our grand children…… Is this kind of Incentivisation good for COUNTRY?? Is this on COUNTRY FIRST principles??

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