U.S., India in talks to settle solar power trade dispute

A worker walks through the installed solar modules at the Naini solar power plant in the northern Indian city of Allahabad March 21, 2012. The 5 MW capacity plant by the Electrical Manufacturing Company Ltd. (EMC) has started under the phase-1 of the Jawaharlal Nehru solar...

REUTERS/JITENDRA PRAKASH (INDIA - TAGS: ENERGY BUSINESS EMPLOYMENT) - RTR2ZNLX

BY DAVID LAWDER-Sat Feb 6, 2016

The United States and India are in talks that could settle a long-running solar power trade dispute, delaying the announcement of a ruling by the World Trade Organization, an Obama administration official said on Friday.

Washington filed the WTO challenge three years ago, claiming that India's national solar power programme illegally discriminated against imported solar panels and related products though its domestic content requirements.

The WTO in recent weeks has twice delayed the public announcement of a ruling in the case, rescheduling it for next Wednesday. Indian media reported last August that a WTO dispute settlement panel had confidentially notified Washington and New Delhi that it would rule against India in the case.

U.S. Trade Representative spokesman Andrew Bates declined to confirm any details of the WTO's intentions, but said the talks were aimed at reaching an out-of-court resolution before any public announcement by the Geneva-based trade body.

"The United States initiated this dispute for the purpose of advancing the rapid deployment of clean, affordable energy in India and around the world," Bates said. "India has now asked to speak with the United States regarding the issue, and in light of ongoing discussions, release of the WTO panel's report ruling has been temporarily delayed."

The U.S. complaint in 2013 alleged that the Jawaharlal Nehru National Solar Mission subsidies were available only if developers used equipment produced in India, violating a key global trade rule. The programme is aimed at easing chronic energy shortages in India, Asia's third-largest economy.

The Obama administration argued that the rules are a barrier to solar products made in America and elsewhere but also effectively raised the cost of generating solar power in India and were extending the country's dependence on fossil fuels.

Green groups, including the Sierra Club, Greenpeace USA, and Friends of the Earth urged the USTR last year to drop the challenge, saying it would hurt efforts to combat climate change by undercutting India's development of a domestic solar industry.

(Reporting by David Lawder; Editing by James Dalgleish)