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Renewables row: US blocks India at WTO on localisation issue

According to reports, India’s request for a dispute settlement panel against the US for incentivising use of domestic over imported goods in its renewable energy programmes was taken up by the World Trade Organisation on Monday.

The move, however, was blocked by the US, which said that it had not flouted norms.

“The US’ move of blocking the panel was expected. Now we will have to put in our panel request again. The WTO will have to oblige the second time as per rules. We are quite confident of a favourable ruling,” a Commerce Ministry official said.

New Delhi has argued that the domestic sourcing measures in the renewable energy programmes in eight US States go against various agreements of the WTO including the ones on Subsidies and Countervailing Measures (SCM) and the TRIMS as they encourage the use of domestic inputs through sops and discriminate against imports

“Consultations were held in Geneva (with the US) in November 2016. Unfortunately, the consultations failed to resolve the dispute,” the submission made by India to the DSB stated.

Interestingly, India’s confidence about winning the case stems from the fact that the US recently won a similar dispute against it at the WTO.

Last year, a panel ruled against mandatory domestic sourcing of solar panels and solar modules under New Delhi’s national solar power generation programme — the ambitious Jawaharlal Nehru National Solar Mission.

“Given how we lost a similar case against our domestic content requirement, there is no reason why the US will not lose the case that we have filed against incentives given by various US States encouraging investors to buy local,” the official said.

India’s dispute is regarding alleged domestic content requirements and subsidies, such as tax credits, provided by eight US states — Washington, California, Montana, Massachusetts, Connecticut, Michigan, Delaware and Minnesota.

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