India-US To Scrap Local Content Policy For Solar Equipment In Dec 2017
The United States and India have agreed that December 14, 2017 will be the last day for India’s domestic content requirement (DCR) category, which mandated the solar tender winners to source locally-made PV equipment.
The Dispute Settlement Body (DSB), which deals with conflict between World Trade Organisation (WTO) members, originally adopted the ruling against the local content policy on 14 October 2016. According to the notice, India has until 14 December this year to enact the ruling of the WTO against its local content policy for solar equipment.
Under the dispute named, ‘India – Certain Measures Relating to Solar Cells and Solar Modules, US and India decided that 14 months from October 14, 2016, the date of adoption of the settlement body recommendations, to December 14, 2017, would be a reasonable time to make the necessary implementations.
The issue started back when the US, led by thin-film PV manufacturer First Solar filed a complaint with the WTO, claiming the DCR policy to be discriminating against the foreign suppliers. It was later argued by the Indian government that the policy was not discriminating as the 100 GW of target leaves a plenty of room for the foreign players to pitch in and win tenders. The case was rules against India by WTPO last September.
India had introduced the DCR policy in the country’s National Solar Mission to facilitate and protect the local manufacturers of solar equipment. India faces a tough competition from the foreign manufacturers due to low prices, especially China. The domestic manufacturing has not been able to pick up to face the price competition, as the tariffs fall to historic low levels.
Indian Solar Manufacturers Association (ISMA) filed a new anti-dumping petition against solar imports from China, Taiwan, and Malaysia with the Directorate General of Anti-Dumping (DGAD), Ministry of Trade and Commerce, requesting levy of interim duties on importers. The Ministry of Trade and Commerce has yet to accept or send official notification regarding the petition, which was filed on June 5, 2017, as reported by consultancy Mercom Capital Group.
It also stated that the Ministry of Finance recently turned down a Rs.200 billion Ministry of New and Renewable Energy (MNRE) plan to support domestic solar equipment manufacturers with incentives and subsidies, which would have helped them compete against low-cost equipment imported from China.
An MNRE official told Mercom, “Now that the finance ministry has shot down MNRE’s plan, we are looking at other viable options to support module manufacturers in the country.” The MNRE official also confirmed that after December 14, 2017, no DCR category tenders will be issued in India.
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